Understanding Personal Financial Literacy

How do you calculate the sales tax on an item?

• Subtract the tax rate from the item's price

• Add the tax rate to the item's price

• Divide the item's price by the tax rate

• Multiply the tax rate by the item's price in decimal form

Which store offers a better discount for a computer priced at $950?

• Cannot be determined without the original prices

• Store A with 20% off

• Store B with 25% off

• Both offer the same discount

What is the effect of a sales rebate on the total purchase price?

• Increases the price

• Varies depending on the product

• Decreases the price

• No effect

What is the annual income required to meet a monthly budget of $4000?

• $52,000

• $40,000

• $44,000

• $48,000

What percentage of the monthly budget is spent on transportation if the budget is $4000 and $400 is spent on transportation?

• 10%

• 5%

• 15%

• 20%

What does a budget help a family to do?

• Track their liabilities

• Increase their net worth

• Manage their expenses

• Calculate their interest

How do you calculate net worth?

• Subtract your liabilities from your assets

• Add your assets and liabilities

• Divide your assets by your liabilities

• Multiply your assets by your liabilities

What is the formula for simple interest?

• A = P(1 + rt)

• I = PRT

• A = P(1 + r)^t

• I = prt/100

How much interest will a $25,000 loan accrue over 5 years at a 2.5% simple interest rate?

• $3,125

• $2,500

• $3,250

• $3,000

What is the total amount in Mr. Sanchez's account after 2 years with a 10% annual compound interest rate, starting with $500?

• $600

• $610

• $550

• $605