Chapter 10: Grow Your Green

There are four common Time Value of Money calculations that can be used to reach long-term financial goals.

• True

• False

There are many technology resources available to help calculate and see the effect of interest on the growth of money over time.

• True

• False

Given an initial investment with the same interest rate and time frame, simple interest will earn more money than compound interest.

• True

• False

Most interest earning accounts use simple interest.

• True

• False

One third of US households between the ages of 30 and 59 will have enough money for retirement by age 70.

• True

• False

What is NOT a common Time Value of Money calculation?

• Future Value of an Annuity

• Present Value of a Lump Sum

• Future Value of Savings

• Future Value of a Lump Sum

What is the average interest rate on a savings account?

• .05%

• .10%

• .29%

• .40%

What is the formula to calculate simple interest?

• i = p × r × t

• i = p – r × t

• i = p × r – t

• p = r × i × t

What is the key to building wealth?

• Start saving after you buy a house

• Start saving early in life

• Start saving when you begin your first full-time job

• Start saving later in life

What formula is used to determine the number of years required to double your money at a given interest rate?

• Simple interest formula

• Rule of 72

• Future Value of a Lump Sum

• Present Value of an Annuity