Financial Literacy Quiz

What is the purpose of a pay stub?

• To inform an employee about the company's overall financial health

• To provide a detailed summary of a paycheck's deductions and net pay

• To request a loan from a bank

• To serve as a formal resignation letter

What is the formula to calculate net pay from a paycheck?

• Gross Pay + Deductions

• Gross Pay - Deductions

• Gross Pay / Deductions

• Gross Pay * Deductions

Which of the following is NOT a common deduction on a pay stub?

• Federal income tax

• State income tax

• Health insurance premium

• Personal savings contribution

Why is it important to save a portion of your paycheck?

• To ensure you can cover unexpected expenses

• To pay more in taxes

• To avoid receiving a pay stub

• To increase the amount of deductions on your pay stub

What is a common feature of a savings account?

• High transaction fees

• Limited withdrawal options

• Interest earned on the deposited amount

• A requirement to invest in the stock market

Which of the following is NOT a typical service provided by banks?

• Issuing credit cards

• Providing legal advice

• Offering loans

• Facilitating money transfers

What does financial literacy enable an individual to do?

• Make informed and effective decisions with all of their financial resources

• Ignore their financial responsibilities

• Depend solely on financial advisors for all money-related decisions

• Avoid paying taxes legally

What is the effect of compound interest in a savings account over time?

• It decreases the total amount of money in the account

• It has no effect on the account balance

• It increases the total amount of money in the account by adding interest to both the initial principal and accumulated interest

• It only adds interest to the initial deposit

Why is it important to review your pay stub regularly?

• To ensure you are being paid the correct amount and deductions are accurate

• To find out how much your coworkers are making

• To learn about the financial status of your employer

• To prepare for job interviews

Roads, police, schools, governmental agencies, fire and emergency services are funded by taxes.

• True

• False