*Savings*

Imagine you just received your monthly paycheck. How would you distribute your income according to the 50-20-30 rule?

• 50% for monthly bills and groceries, 20% for your savings account, 30% for your hobbies and entertainment

• 50% for your savings account, 20% for monthly bills and groceries, 30% for your hobbies and entertainment

• 50% for your hobbies and entertainment, 20% for your savings account, 30% for monthly bills and groceries

• 50% for monthly bills and groceries, 20% for your hobbies and entertainment, 30% for your savings account

John is a typical American who lives paycheck-to-paycheck. What could be some reasons for his financial situation?

• John's wages are low

• The cost of living in John's city is high

• John lacks financial education

• All of the above

Imagine you have some money in your savings account. How does a rise in inflation affect the value of this money?

• It increases the value of your money

• It decreases the value of your money

• It has no impact on the value of your money

• It depends on the interest rate

What is true about compound interest?

• It is calculated on the initial principal
• It is calculated on the initial principal and all the accumulated interest
• It is calculated only on the accumulated interest
• It does not include interest

John has $1000 in his bank account. He wants to understand the difference between compound interest and simple interest. Can you explain it to him?

• Compound interest is calculated on the initial $1000 only

• Compound interest is calculated more frequently on the $1000

• Simple interest is calculated more frequently on the $1000

• Simple interest is calculated on the initial $1000 only

What is the impact of a higher credit score?

• It increases the interest rate on loans

• It decreases the interest rate on loans

• It has no impact on the interest rate on loans

• It depends on the type of loan

According to the principle of 'Pay Yourself First', what percentage of your income should you ideally set aside for savings?

• 5%

• 10%

• 20%

• 30%

Your child, John, is about to start high school and you're thinking about his future college expenses. You've heard about a 529 account. What exactly is it?

• A retirement savings account you can use when John retires

• A health savings account for John's medical expenses

• A college savings account to fund John's future education

• A tax-free savings account for general purposes

John is considering investing in stocks. What is a key difference between investing in stocks and saving in a bank account?

• Investing in stocks guarantees a fixed return

• Investing in stocks is less risky than saving in a bank account

• Investing in stocks can potentially offer higher returns but with more risk

• Investing in stocks does not involve any risk

Assuming an annual interest rate of 8%, in how many years will your investment in a savings account double?

• 6 years

• 8 years

• 9 years

• 12 years