PFL Unit 3 Test

When title pawn lenders offer you a loan, what do they want in return?

• Collateral

• Money

• Your job

• Your bank account

How is simple interest determined?

• it is based on the amount of money you put in the bank

• it is based on the amount of money you put in the bank plus the interest the bank pays

• it is based on how much you owe the bank

• it is based on how long your loan is for

What are the 2 common types of interest you may have to pay when taking out a loan?

• Simple & Compound

• Simple & Fixed

• Fixed & Variable

• Fixed & Compound

What two types of interest are generally seen as most desirable for consumers?

• Simple & Fixed

• Simple & Variable

• Compound & Fixed

• Compound & Variable

What is the difference between nominal value and real value?

• Nominal value is adjusted for inflation, real value is not

• Real value is adjusted for inflation, nominal value is not

• Nominal value includes the amount owed on a loan, real value does not

• Real value includes the amount owed on a loan, nominal value does not

What organization controls the money supply in the United States?

• National Bank

• Congress

• Federal Reserve

• Supreme Court

How is compound interest calculated?

• It is based on the amount of money that you put in the bank

• It is based on the amount of money you put in the bank plus the interest the bank pays

• It is based on how much you owe the bank

• It is based on how long your loan is for

What is inflation?

• The overall rise in price levels

• The total amount owed on a loan

• A fee for taking out a loan

• The amount of money earned in a savings account

When making an investment, there is a direct relationship between what 2 things?

• Level of risk and level of reward

• Level of incentive and level of penalty

• Level of risk and level of penalty

• Level of incentive and level of reward

What is an IRA?

• Initial Retirement Account

• Internal Revenue Account

• Individual Reward Account

• Individual Retirement Account