Financial Literacy Assessment

1. What does APR stand for in financial terms?

• a) Annual Percentage Rate
• b) Average Payment Requirement
• c) Annual Payment Ratio
• d) Average Percentage Return

2. What is the definition of "budget" in financial literacy?

• a) A plan for saving money
• b) A plan for spending money
• c) A plan for investing money
• d) A plan for borrowing money

3. Which of the following is an example of a fixed expense?

• a) Groceries
• b) Entertainment
• c) Rent
• d) Dining out

4. What does the term "credit score" represent?

• a) The amount of money you have in your bank account
• b) A numerical representation of your creditworthiness
• c) The total amount of debt you owe
• d) The number of credit cards you own

5. What is the purpose of a savings account?

• a) To earn interest on your money
• b) To make everyday purchases
• c) To borrow money from the bank
• d) To invest in the stock market

6. Which of the following is an example of a variable expense?

• a) Rent
• b) Car insurance
• c) Groceries
• d) Mortgage payment

7. What does the term "interest" mean in financial context?

• a) The amount of money you owe to the bank
• b) The amount of money you earn on an investment or deposit
• c) The total value of your assets
• d) The amount of money you spend on goods and services

8. What is the purpose of a debit card?

• a) To borrow money from the bank
• b) To earn interest on your purchases
• c) To withdraw cash from an ATM/Use money in Checking Account
• d) To build credit history

9. What does the term "compound interest" refer to?

• a) Interest calculated only on the principal amount
• b) Interest calculated on both the principal and the accumulated interest
• c) Interest paid in equal installments over time
• d) Interest that decreases over time

10. What is the definition of "inflation"?

• a) The rise in the overall level of prices for goods and services
• b) The decrease in the overall level of prices for goods and services
• c) The fluctuation of stock market prices
• d) The increase in the value of currency