Financial Literacy Quiz: Saving

What is the purpose of saving money?

• To spend on unnecessary items

• To invest in risky ventures

• To be prepared for any type of expense

• To donate to charity

How much should you ideally save in your emergency fund?

• 10% of your monthly income

• 3-6 months of expenses

• 50% of your monthly income

• As much as you can spare

Tags

CCSS.7.RP.A.3

What does a savings account offer?

• Access to unlimited withdrawals

• Potential to earn interest

• No security for your money

• High-risk investment options

What is compound interest?

• Interest calculated only on the principal amount

• Interest that doesn't grow over time

• Interest that is paid by the borrower

• Interest calculated on both the principal and the accrued interest

Tags

CCSS.7.RP.A.3

What is the benefit of a money market account?

• No access to withdrawals

• Higher interest rate and more liquidity

• Lower interest rate and less liquidity

• No interest earned and high liquidity

What is the purpose of a Roth individual retirement account (IRA)?

• To save for short-term goals

• To save for retirement on a pre-tax basis

• To save for long-term goals

• To save for retirement on an after-tax basis

What is the Federal Deposit Insurance Corporation (FDIC) responsible for?

• Managing retirement accounts

• Insuring most private bank deposits

• Regulating stock exchanges

• Administering consumer protection legislation

What is the purpose of an estate plan?

• To pay off outstanding credit card balances

• To invest in mutual funds

• To arrange for the dispersal of an individual's estate in the event of death

• To decrease the value of assets over time

What is the function of a thrift savings plan?

• To fund the U.S. government's Social Security program

• To provide loans to customers

• To help federal employees and members of the uniformed services save for retirement

• To manage estate plans for individuals

What is the significance of a variable interest rate?

• It is a fixed rate that does not fluctuate over the length of the loan or investment term

• It is a rate that is paid by the borrower

• It is an interest rate that fluctuates based on market changes

• It is a rate that is charged on outstanding credit card balances

Tags

CCSS.7.RP.A.3