Financial Literacy Quiz

Sylvester is taking out a loan and is confused by the jargon. Which of the following explanations might help him?

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

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

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

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

Which amount is found when you subtract your grants and scholarships from a college’s cost of attendance?

• Sticker price

• Net price

• Student Aid Index

• Room & board

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

• Buy a prepaid card using cash

• Deposit a paycheck from your job

• Insert your debit card at a store and sign the electronic machine or paper receipt

• Take money from the ATM using your credit card

In order to qualify for financial aid, prospective college students must submit their ___________.

Which of the following best describes the amount of money you'll have if you put $1000 into a CD earning 2% annual compound interest for 10 years? You can ignore the impact of inflation in this question.

• The same $1000 you started with

• Exactly $1200

• Slightly more than $1200

• $2000

Which of the following can be found in your credit report?

• Your checking and savings account balances

• How long you’ve been a member of a bank or credit union

• Your credit payment history

• A list of items you’ve purchased using credit

When making a decision about a financial product (loan, savings account, credit card, etc.), which of these pieces of advice is LEAST valuable?

• Compare products based on the factors you personally find most important

• Do research to learn more about each of the options

• Read the fine print of any disclosures so you understand the fees and terms of your account

• Simply choose the option that your parents use

Which of the following will result in your paying the LARGEST amount of interest to the credit card company?

• Paying 20% of your credit card balance every month

• Making the minimum payment every month

• Paying off your balance every month

• Saying 'credit' every time the cashier asks 'Debit or credit?'

Which of the following is TRUE about a Target Date Fund (TDF)?

• It is an actively managed fund that usually charges a 1-2% management fee

• A TDF will automatically adjust your assets for you over time as you get closer to retirement

• You can only sign up for the TDF that aligns with your projected retirement year

• A TDF only invests in stocks and will adjust your money between different industries over time