Final Exam - Finance 2nd semester

David's gross income is $127.25

David's deductions are $25.20

What is David's net pay?

• $102.05

• $102.45

• $112.05

• $152.45

What does the bank do with the money you put in your savings account?

• Use it to create a sculpture in the bank

• Let you take it out whenever you want with your debit card

• Automatically transfer it to your checking account each month

• Use it to give out loans to other customers (and pay you interest)

What does it mean when a savings account has a minimum balance requirement?

• You will have to pay 10% interest if you drop below a certain amount in your account.

• If you put too much money in your savings account it will not be protected.

• Your account will automatically be closed if it drops below a certain amount.

• You have to keep a certain amount of money in your account to avoid fees and earn interest.

Which of the following is an advantage of saving money each month?

• Savings gives you a better interest rate on credit card purchases.

• Savings increase your monthly work income.

• Savings allow individual to pay for an unexpected expense without going into debt.

• Savings create the opportunity to build your credit score.

Which individual would be BEST prepared for an unexpected expense?

• Kim is most prepared because she has the highest income.

• Scott is most prepared because he has the lowest monthly expenses.

• Nikki is most prepared because she is saving more money each month.

• Kim is most prepared because she has the highest monthly expenses.

What is a credit score?

• a three-digit score that tells lenders how much money you make each year.

• A five-digit numerical rating that reflects how likely you are to repay your debt.

• A three-digit numerical rating that reflects how likely you are to repay your debt.

• A credit score is a five-digit numerical rating that reflects how likely you are to fail at paying your debts

Frank and Jasmere are each buying a car and need a $20,000 loan to pay for it.  Frank has a credit score of 730 and Jasmere has a score of 600. Which of the following statements is TRUE?

• Frank will probably get a better interest rate on the car loan.

• Jasmere and Frank will pay the same amount of interest for the car loan.

• Jasmere will probably get a better interest rate on the car loan.

• Lenders are not allowed to charge different interest rates to people.

Which of the following is a good strategy for personal savings?

• Save whatever money you have left over at the end of the month

• Save half of your paycheck and then pay whatever bills you can

• Borrow money to pay your bills then save your paycheck.

• Save a percentage of every paycheck directly into a savings account

Money you save to pay for unexpected expenses is called what?

• investment account

• pay day loan

• emergency fund

• retirement fund

How much money should you have in an emergency fund?

• Enough to cover 3-6 months of all your expenses.

• Enough to cover 1 year of al your expenses.

• Enough to cover 1 month of urgent expenses,

• Enough to cover 12 months of rent.