Financial Literacy Quiz

Magda is going to finance her car purchase using an auto loan. Which statement below is accurate?

• Her principal is the cost of the car, minus any down payment she makes

• Her interest rate is the total cost she'll pay after making all of her principal and interest payments

• Choosing a shorter term means it will take her longer to repay the loan

• It’s likely that her monthly payment will be between 4-5% of the cost of the car

Jaime is creating a budget for the first time and doesn’t know which to use - NET PAY or GROSS PAY. What do you tell him?

• Use net pay, because it’s the total amount you’ve earned minus taxes and other deductions.

• Use gross pay, because it’s the total amount you’ve earned minus any recurring bills you owe for the month.

• Use net pay, because it’s the total amount you’ve earned for the month.

• Use gross pay, because that is the amount that is reported to the government for taxes.

Jennifer is trying to save up for an emergency fund of $3000. Which saving strategy would likely be most effective in helping her meet her goal?

• At the end of the month put any leftover money from her checking account into her savings instead

• Set up a direct deposit of $75 from each paycheck to automatically get put into her savings account instead of her checking account

• Wait until she's paid off all of her credit card and student loan debt, and then start saving for an emergency fund

• Every month, after she's paid for rent, student loan and credit card debt, utilities, and groceries, put $50 or $100 into savings

Super Smarts University has a sticker price of $45,000 per year. Kyle is applying there and uses their online net price calculator, which calculates a net price of $38,000 per year based on the information he is provided. He's #1 in his high school class, and he's got great SAT scores; so he's pretty sure he'll get in. How much will Kyle pay to attend?

• The exact net price

• Within a range of $5000 of the sticker price

• $0, because he'll likely get a full ride due to his high school achievements and scores

• It's impossible to know how much he'll pay until he receives his financial aid package

Look at this image: Diagram showing the relationship between insurance premiums and deductibles. Which of these statements is TRUE regarding the relationship between insurance premiums and deductibles?

• The higher the premium the higher the deductible

• The lower the premium the lower the deductible

• The higher the premium the lower the deductible

• The price of premiums has no relationship to the price of deductibles

Which of the following would have the most positive impact on your credit score?

• Close any credit cards you're no longer using

• Spend more money on each of your credit cards

• Take out a car loan for $18,000 or more

• Make all payments on time, and focus on paying down any credit cards that are close to their credit limits

Zoe buys three new lipsticks from a store at the mall. Which payment method would reduce the amount of money in her checking account?

• Pays with a prepaid card she loaded earlier in the month

• Uses her credit card and says, "Credit" when the cashier asks, "Credit or debit?"

• Uses her debit card and says, "Credit" when the cashier asks, "Credit or debit?"

• Pays with cash she had in her purse

StayWell Health Insurance is offering a plan with a monthly premium of $250, a deductible of $3500, and maximum out-of-pocket expenses of $6000. If Sheldon chooses this insurance, what is the MOST he should pay in one calendar year?

• $6,000

• $9,000

• $9,500

• $9,750

Which statement BEST describes how wants and needs vary from each other?

• Your wants may be someone else's needs and the other way around.

• Needs are things you can live without whereas wants are things you must have.

• Wants are things you can live without whereas needs are things you must have.

• Both A and C

• Both A and B

Which definition best describes the FAFSA?

• The amount of money the federal government offers you in student loans

• The paperwork your bank has you complete in order to take out a personal student loan

• The paperwork you complete in order to have part of or all of your student loan debt forgiven

• The application you complete in order to determine eligibility for federal student aid