Chapter 3 Review (Saving Money)

Which of the following would be considered an emergency fund expense?

• Lost cell phone.

• Video game sale

• Blown car tire

• Shoe sale

"Rate of return" is a phrase used to describe what aspect of investing?

• Compound growth

• Risk and return ration

• Accrued interest

• Inflation

In The Five Foundation, what is The Third Foundation?

• Pay cash for college.

• Pay cash for your car.

• Save a $500 emergency fund.

• Get out and stay out of the debt.

When you make a purchase but later wish you hadn't done so, you experience:

• selfishness

• buyer's remorse

• impulsiveness

• time value

Which of the following questions helps you determine if something is actually an emergency expense?

• Is it urgent?

• Is it necessary?

• Is it unexpected?

• All of the above.

What two elements do you need to build wealth through compound growth?

• An inheritance and a lawyer

• Money invested and time

• Money invested and good stocks

• Time and a wealthy relative

Match the following

• Compound growth

• The initial amount of money you deposit or invest is called the

• emergency fund

• The ________ refers to the earning potential of money.

• interest rate

• ______ ______ is the average rate of growth for an investment over a period of time.

• time value of money

• 45% of Americans have less than $1000 saved for a(n)

• principal

• _________ deals--such as 90 days-same-as-cash--are often used to get you to buy higher-priced items.

Match the following

• rate of return

• An investment's _____ __ ______ is it's percentage of gain or loss over time.

• inflation

• The price of goods and services increases over time due to

• large purchase

• You save for a(n) ______ ______

  when you don't have the cash to buy it now.

What are the three reasons to save money?