Personal Financial Literacy (7th)

Front

What is interest?

Back

Interest is the cost of borrowing money or the return on investment earned on savings, usually expressed as a percentage of the principal amount.

Front

How do you calculate simple interest?

Back

Simple interest can be calculated using the formula: Interest = Principal x Rate x Time.

Front

What is net worth?

Back

Net worth is the difference between total assets and total liabilities. It represents the financial position of an individual or entity.

Front

How do you calculate net worth?

Back

Net worth = Total Assets - Total Liabilities.

Front

What are assets?

Back

Assets are resources owned by an individual or entity that have economic value, such as cash, property, and investments.

Front

What are liabilities?

Back

Liabilities are financial obligations or debts that an individual or entity owes to others, such as loans and credit card balances.

Front

What does it mean to have a negative net worth?

Back

A negative net worth means that an individual's liabilities exceed their assets, indicating financial instability.

Front

What is a savings account?

Back

A savings account is a bank account that earns interest on the money deposited, allowing individuals to save and grow their funds.

Front

What is the purpose of budgeting?

Back

Budgeting helps individuals plan their finances by tracking income and expenses, ensuring they can meet their financial goals.

Front

What is a credit card?

Back

A credit card is a payment card that allows individuals to borrow funds from a financial institution to make purchases, with the obligation to repay the borrowed amount.