Mastering Personal Finance Basics

Which of the following is the best definition of a budget?

• A list of all your debts

• A plan for how to spend and save your money

• A record of your past spending

• A summary of your bank account balance

If you earn \$200 per week and want to save 20% of your income, how much should you save each week?

• \$10

• \$20

• \$40

• \$50

Which of the following is considered a fixed expense?

• Grocery bills

• Movie tickets

• Monthly rent

• Clothing purchases

What does the term "interest" mean in personal finance?

• The amount you borrow from a friend

• The extra money you pay or earn when borrowing or saving money

• The total amount of your savings

• The price of a product

If you deposit \$1,000 in a savings account with an annual interest rate of 5%, how much interest will you earn in one year (simple interest)?

• \$25

• \$50

• \$100

• \$500

Which of the following is the best example of a want rather than a need?

• Water

• Medicine

• Designer sneakers

• Shelter

What is the main purpose of insurance?

• To increase your income

• To protect you from financial loss

• To help you save money

• To pay your taxes

If you have a credit card balance of \$500 and the annual interest rate is 18%, what is the interest charged for one year if you do not pay off the balance? (Simple interest)

• \$18

• \$50

• \$90

• \$180

Which of the following best describes the term "net income"?

• Your income before taxes and deductions

• The total amount you spend in a month

• Your income after taxes and deductions

• The amount you borrow from a bank

If you buy a laptop for \$800 and pay 8% sales tax, what is the total cost?

• \$816

• \$840

• \$864

• \$880