Personal Finance- Managing personal finance

Which of the following is NOT a type of borrowing for an individual?

• Mortgages

• Credit cards

• Premium bonds

• Personal loans

What is the main purpose of an overdraft?

• To save money

• To invest in real estate

• To fund short-term cash shortages through the current account

• To earn interest

What is a key advantage of using an overdraft?

• It is only available for large amounts

• It requires a long-term commitment

• It allows borrowing only when needed

• Only pay interest on the amount borrowed

What happens to the ownership of the item if all installments of a hire purchase are not paid?

• The consumer gains ownership

• The seller or lender retains ownership

• The item is destroyed

• The item is donated

What is an advantage of payday loans?

• Solves long-term financial problems

• Quick access to funds when required

• Low interest rates

• No need for repayment

What is a key feature of payday loans regarding interest?

• Interest rates are low

• Interest rates are high

• Interest is not charged

• Interest rates are fixed

What is a financial issue that payday loans can solve?

• Long-term debt

• Short-term cash flow problems

• High savings

• Investment losses

Isabelle is considering opening an ISA. What is the purpose of an ISA?

• To act as an incentive to save and earn interest tax free

• To provide instant access to funds

• To offer high-risk investments

• To allow unlimited spending

Anaya has a savings account where she deposits money regularly but makes no withdrawals. What is the effect of interest received on her savings?

• Decreases the value

• Increases the value as result of compound interest

• No effect

• Causes penalties when money is paid in

What is the purpose of moving money from a saving account to a current account?

• To avoid fees

• To earn more interest

• To enable withdrawal at an ATM

• To close the account