Chapter 2 Financial Literacy Test

Which of the following refers to the price paid for using money?

• Interest

• Debt

• Principal

• Compound Growth

Which of the following refers to the amount of money borrowed?

• Interest

• Debt

• Principal

• Compound Growth

Which of the following can affect the loan interest rate?

• Your salary

• Purpose of the loan

• Your prior financial behaviors

• All of the choices are correct.

Which of the following is a rule that can help you grow your money?

• The longer you let your money grow, the more you will have in the future (assuming the same interest rate).

• The more interest you earn, the more you will accumulate over time.

• The higher the interest rate you want, the more risk you must take.

• All of these answer choices are correct.

The Federal Deposit Insurance Corporation and the National Credit Union Administration protect savings deposits up to what amount?

• $250,000

• $350,000

• $450,000

• $500,000

If risk is low, then the interest rate that your money earns is generally:

• high.

• low.

• doubled.

• not affected.

What is the Annual Percentage Rate (APR) if a bank pays 0.3% interest monthly on savings?

• 1.8%

• 2.4%

• 3.6%

• 4.8%

What is the APR if a bank pays 0.25% interest monthly on savings?

• 2.4%

• 3.0%

• 3.6%

• 4.8%

Which of the following provides an estimate of how long it will take you to double your money?

• Rule of 72

• Compounding Interest

• APR

• APY

How long will it take for your money to double if the Annual Percentage Yield (APY) is 6%?

• 12 years

• 12 months

• 10 years

• 10 months