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WorksheetsFinal Exam Personal Finance
Total questions: 77
Worksheet time: 4hrs 32mins
Compound interest earns more than simple interest at the same interest rate because compounding pays interest on the interest earned.
True
False
Interest compounded semiannually is compounded 4 times a year
True
False
Interest compounded quarterly is compounded how many times?
2
4
12
1
Interest compounded daily is compounded how many times?
365
12
4
2
21. Ron and Annie have $1,239.45 in their checking account. During the week, Annie goes to an ATM and withdraws $80. The following week Ron deposits his paycheck of $689.65. Annie then pays bills online in the amounts of: $212.80,$55, $49.76, and $110.35. What is the current balance in their checking account?
$1,441.19
$2,421.19
$1,421.19
$1,421.91
Sonja and Jake just got married. They received $4,500 in gift money and deposited it into a savings account that pays 2.85% simple interest. How much will they have in savings after 3 years?
$348.75
$4,884.75
$4,448.75
$384.75
Conrad Savings Bank has a $50 overdraft fee. On Friday, Mr. McQuire deposited his paycheck of $468.92 for a total account balance of $712.34. The next morning, his wife wrote a check for $1,267.45 for a new refrigerator and stove. The check cleared the bank by the end of the day. What is the current balance in the McQuires’ account?
–$798.53
–$605.11
–$555.11
–$405.11
Becky is looking for a new job as an account executive. She responds to a classified ad for a position that pays 34.5K. What would Becky's weekly salary be to the nearest cent, if she gets this job?
$718.75
$1,794,000
$2,875
$663.46
$1326.92
Danny just answered a help-wanted ad. The ad states that the job pays $27K annually. What would Danny's monthly salary be if he gets this job?
$324,000
$27
$2,250
$519
How much is the loan amount for?
FICO Scores range from
100 - 500
200 - 300
300 - 850
100 - 1000
According to the 50-30-20 Rule, what percent of your income should be saved?
70%
20%
10%
According to the 50-30-20 Rule, 50% of your income should be...
Saved
Needs
Invested
Taxed
The savings tool that offers higher interest rates that are dependent on the higher balance amount is called a...
CD
Money Market
Checking
Savings
Credit Union
Retail Bank
Online Bank
The cost of borrowing money that is usually expressed as a percentage.
interest
savings plan
scarce
purchase
Cost of borrowing money which is expressed as a yearly percentage
Mortgage
Principal
APR
Finance company
What is a credit score?
a three-digit score that tells lenders how much money you make each year.
A five-digit numerical rating that reflects how likely you are to repay your debt.
A three-digit numerical rating that reflects how likely you are to repay your debt.
A credit score is a five-digit numerical rating that reflects how likely you are to fail at paying your debts
When opening a savings account or planning your budget, which unexpected expenses should you consider?
home repair
car repair
medical expenses
all of the above
An expense that differs from month to month.
Income
Fixed Expense
Variable Expense
Budget
An expense that is the same amount and cannot easily be changed.
Income
Fixed Expense
Variable Expense
Budget
By law, you are allowed to receive a free copy of your credit report from all three credit reporting agencies once every _______________.
2 years
year
6 months
3 months
If you make a payment after the due date, you receive a penalty called a _______________________.
Grace Period
Late Fee
Credit Limit
Finance Charge
What is a secured loan?
A loan with no collateral
A credit card loan with a limit
A personal line of credit that allows for more money to be taken out.
A loan that involves you giving collateral in case you default
An example of an unsecured loan is:
Car loan
Mortgage
Credit Card
Boat loan
Collateral on a loan is:
A credit card interest rate
Something of value that you promise to give someone if you don't repay a loan
A personal loan backing by someone who has excellent credit.
Investors who invest money into a personal business.
Which of these best describes the difference between gross pay and net pay?
Gross pay is the amount you make the entire year and net pay is the amount you make on each paycheck
Gross pay is the amount your employer pays you and net pay is the amount of taxes you pay the government
Gross pay includes salary, tips, commissions, and bonus, while net pay is just your salary
Gross pay is the entire amount you earn that pay period, and net pay is the amount you take home after taxes, benefits, and voluntary contributions are paid.
Which set of items would be appropriate to include on your resume during high school.
Education, computer skills, starting salary request
Volunteer experience, sports team participation, computer skills
Requested vacation days, education, special dietary needs
Education, scheduling requests, personal references
When do you start filing taxes?
When you turn 18
When you make more than the minimum income bracket requirement for earnings.
When you get a full-time job (part-time does not count)
When you are notified by the IRS that you are required to pay federal income taxes
When do you start paying taxes?
When you turn 18
When you make more than the minimum income bracket requirement for earnings.
When you get a full-time job (part-time does not count)
When you are notified by the IRS that you are required to pay federal income taxes
Order the type o financial aid from MOST attractive to LEAST attractive.
private loans, grants/scholarships, work study, federal loans
grants/scholarships, work study, federal loans, private loans
work study, federal loans, grants/scholarships, private loans
grants/scholarships, federal loans, work study, private loans
Which of the following does NOT impact your credit score?
The number of times you apply for credit, even if you don't open an account each time
Your debt-to-credit ratio
Your history of on-time payments
The types of items you're buying using credit
What is the single best way for him to improve a credit score?
Cancel credit scores
Make on-time payments
Get a car loan
Check credit score often
Who is the number one target for a credit card company to get to open a credit card?
People without a high school diploma
Young adults
The elderly
Middle Aged Adults
The process by which the holder of a mortgage (bank) sells the property of a homeowner who has not made payments on the mortgage.
Payday lending
Loaning
Bankruptcy
Foreclosure
This type of non-profit financial money institution whose members can borrow from pooled deposits at low interest rates.
Credit union
Bank
Financial Advisor
Online stock broker
If you make your credit card payment and don't pay off your balance in full by the due date, you will pay a
late fee
credit limit
finance charge
grace period
What is the best reason for why someone would want to lease a house instead of buy one?
They want full responsibility for all the repairs
They want to be able to make money when they sell the home
They are planning on living there only for a short period of time
They want to avoid an increases in payments and do not want to deal with a landlord.
Which payment option takes money out of your bank immediately?
Cash
Check
Debit Card
Credit Card
Which example shows an advantage of owning a car over leasing one?
Smaller monthly payments and a good warranty
The Warranty will expire which means that you will be responsible for repaying payments
No restrictions on the number of miles to drive and the ability to customize or make changes to the car
You will drive a new car for a limited period of time
Wearing a seat belt, not texting when driving, and driving carefully are all examples of...
insurance policies
warranties
risk management strategies
deductibles
What can liability insurance protect you from?
Pays for property damage you cause
Contract Fees
Pays for the damage you cause someone else
Both A and C
Earning a degree can be expensive but which example shows why it might be worth it?
A degree will not help you get a job
The more money you pay for the degree guarantees a higher salary
Individuals with a bachelor's degree typically earn a higher annual salary than those without one.
A highschool diploma allows you to earn money instead of going into debt.
Which of the following statements about savings accounts is FALSE?
Savings accounts don't usually pay interest on the money you deposit.
Savings accounts limit the number of withdrawals that can be made each month.
Savings accounts may require you to maintain a minimum balance to avoid paying a fee.
Savings accounts are best used to store money for longer-term goals.
Investing is best for?
short-term financial goals, like building an emergency fund
earning a little interest while keeping your money safe
long-term financial goals, like paying for retirment
Guaranteed quick growth to your money
When setting a budget, you should consider
financial goals, current expenses, and income.
mostly income
creative ways to spend your money
mostly your goals
What is one way you can ensure that you do not go over budget?
Round up your expense estimates to add a buffer
Use most of your budget for entertainment expenses
Find a friend that enjoys going shopping
Buy all of your wants at once, when you have the money to do it.
The price of a single item within a group of items is known as the _____ price of the item
group
item
unit
total
What are possible red flags or signs of a scam when buying a car?
Being told your financing fell through
Lengthy negotiations
Charging excessive fees
Both A and C
Why could only paying the minimum on your credit card be a bad idea?
The interest rates will compound and you will pay much more than you borrowed
There is no disadvantage to paying the minimum balance
Paying over time could mess up your budgeting for the weeks ahead
You should not use a credit card under any circumstance, only pay for things you can afford at that time
Buying a home security system is an example of protecting your home against
deductibles
risk
warranties
Insurance
Why should you purchase insurance?
To prevent financial burden in the case of an accident, theft, or another event
To get a warranty on a household item
To purchase monthly premiums
To avoid committing crimes
Who pays the insurance premium?
The insurance compnay
the claims adjuster
the government
the policyholder
Federally-funded grants require the student to...
earn above average grades
have a membership in a high school club
perform volunteer work for a local community agency
demonstrate financial need
Where do banks get the money to lend out to consumers?
From their clients' credit card accounts
From their clients' savings accounts
From the Federal government
From their own money vaults
How do banks make money off of the credit they issue?
They charge a large, one-time fee at the start of the loan
They take out a small fee each month from your checking account
They charge a high interest rate on the loan
This is a trick question - they DON'T make money!
What may NOT impact the interest rate on your loans?
Your relationship with the financial institution
Your credit score
The loan amount
Your level of education
Why does the amount of INTEREST you owe on a loan decrease over time?
The institution trusts you more, so they lower the interest
With each payment, principal increases; so interest lowers
Banks are legally required to lower interest rates over time
With each payment, principal decreases, so interest lowers
How do you avoid paying interest on your credit card (or any other loan for that matter)?
Always make the minimum payment over time
Pay interest 1st, then pay what you can on leftover balance
Always make the full payment on time
Pay the principal 1st, then pay what you can on interest
Which is TRUE when you make only the minimum payment each month?
You ar charged interest on the remaining balance
Your credit line is restored to its maximum amount
Credit card companies have permission to sell your information
It is the fastest way to pay off your debt
A shorter auto loan term means ____ monthly payments & ____ total interest you'll pay.
higher, less
lower, more
higher, more
lower, less
