Financial Literacy Quiz

What is compound interest?

• An inquiry into one’s credit report

• A finance charge

• Interest calculated on the initial principal, which also includes all of the accumulated interest of previous periods of a deposit or loan

• A fee paid to open an account

Which of the following is recommended as the best low-risk way to build credit?

• An auto loan with a co-signer

• A secured loan or credit card

• An unsecured credit card

• A mortgage loan

Which of the following cards is linked directly to a checking account?

• Debit card

• Visa gift card

• Credit card

• Prepaid Visa credit card

When creating or updating a budget, which category is non-essential?

• Entertainment

• Food

• Housing

• Transportation

Which of the following factors influence your credit score?

• Race

• Religion

• Payment history

Which of the following is a likely result if someone cannot or will not repay an auto loan?

• Repossession

• Foreclosure

• Co-signing

• Annual account fee

Which of the following is a likely result if someone cannot or will not repay a mortgage (home loan)?

• Repossession

• Foreclosure

• Co-signing

• Annual account fee

The current loan crisis in the United States revolves around which of the following?

• Credit card debt

• Mortgages

• Auto loans

• Student loans

Which of the following is the correct term for the original amount borrowed?

• Compound interest

• Principal

• Interest

• Roth

At what age can you legally enter a contract (including a loan agreement)?

• 16 years old

• 18 years old

• 21 years old

• 25 years old