Personal Finance Unit Exam

Zion created a budget to help manage his allowance. What is the main purpose of this financial tool?

• To track interest on loans

• To avoid spending money on needs

• To plan income and expenses

• To earn faster credit increases

Quentin wants to build his credit history. Which of the following actions would most likely help improve his credit score?

• Maxing out his credit card monthly

• Making late payments

• Always paying the minimum due

• Paying bills on time consistently

Aaron placed $2,000 into a savings account earning 3% simple interest annually. After one year, how much interest will he have earned?

• $60

• $6

• $600

• $20

Jackson took out a student loan. What makes this type of debt generally acceptable?

• It has no consequences

• It helps improve a social life

• It’s an investment in future earning potential

• It’s used for non-essentials

Jake is deciding between a checking and savings account. He wants to pay bills easily and have frequent access to his money. What should he choose?

• Savings account

• Certificate of deposit

• Checking account

• Retirement account

Devin pays his car insurance premium monthly. What type of expense is this considered?

• Irregular

• Fixed

• Variable

• Discretionary

Kirsten was injured and can’t work for several months. Which insurance policy would help replace her income during this time?

• Auto

• Disability

• Life

• Renters

Kennedy is applying for her first credit card. What will the credit card company most likely consider before approval?

• Her grocery list

• Her attendance record

• Her credit history and income

• Her career goals

Lennox wants to retire at age 65. Which type of account should he begin contributing to now to prepare financially?

• Checking account

• Roth IRA

• Car loan

• Student loan

When Hayden makes a purchase using her debit card, what is actually happening?

• She’s borrowing money from the bank

• The money is being withdrawn directly from her checking account

• Her account balance is increased

• She’s earning interest on the purchase