Personal Finance Final Exam 2023-24

First Name:

Last Name:

Period

• 4A
• 3B
• 4B

Ima Kween is taking out a loan and is confused by the jargon. Which of the following explanations might help her?

• TERM is the length of the loan, and INTEREST RATE is how much total money she will pay

• PRINCIPAL is how much she owes per month, and TERM is how much she owes overall

• INTEREST RATE is how much the lender charges per year for the loan, and PRINCIPAL is the initial amount Ima borrows

• MONTHLY PAYMENT is how much interest costs her each month, and TERM is the name of her lender

Which should you use when creating a budget - your NET PAY or GROSS PAY?

• Net pay, because it’s what is reported to the government by your employer for tax purposes
• Gross pay, because it’s the total amount you’ve earned that month
• Net pay, because it’s the total amount you’ve earned minus taxes and other deductions
• Gross pay, because it’s the total amount you’ve earned minus any recurring bills you owe for the month

If Parker (age 15) wants to start establishing a credit history next week, which action should he take to meet that goal?

• Always say "credit" when asked "credit or debit?" at a store

• Ask his parents to cosign a credit card or add him as an authorized user on their credit card

• 1. Any time he borrows money from a friend or family member, be sure to pay it back promptly

• 1. He can't start building credit until he's 18

  2. (this answer is wrong)

Which of the following is a recommended way of following up with a personal connection after a job interview?

• Returning to the office unannounced the next day to express your continued interest in the job

• Buying the interviewer(s) a nice gift

• Connecting to the interviewer(s) on LinkedIn

• Sending a personalized thank you letter or email

Which one of the following is NOT a benefit of taking out a loan with a cosigner?

• There are no penalties for late payments
• You gain access to loans you might not have been approved for on your own
• Your interest rate might be lower
• Your credit score will be positively impacted by making timely payments

Which of the following is a method of accessing the money in your checking account?

• Buy a prepaid Visa card using cash

• Deposit a paycheck from your job
• Use Venmo or Cash App to pay for a Doordash order

• Take money from the ATM using your credit card

Your little sister wants to know how renters insurance works. Which description should you give her?

• When something goes wrong at your apartment, you pay one premium to open a renters insurance policy and ask the insurance company to cover your losses
• Your rent payments go to the building’s owner, and that person covers your losses if anything goes wrong at your apartment
• You pay monthly premiums into a savings account, and if something goes wrong, you can withdraw the money to pay your claims
• You pay monthly premiums to buy a policy, and then you file a claim to have the insurance company cover your losses if something goes wrong