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WorksheetsChapter 3 Review: Saving Money
Total questions: 40
Worksheet time: 19mins
An investment's ________ is its percentage gain or loss over time.
Compound Growth
Rate of Return
Interest Rate
Compound Interest
_________ is the average rate of growth for an investment over a period of time.
Time Value of Money
Large Purchase
Compound Growth
Rate of Return
The price of goods and services increases over time due to ________.
Rate of Return
Interest Rate
Compound Interest
Inflation
The initial amount of money you deposit or invest is called the:
Emergency Fund
Accrued Interest
Principal
Time Value of Money
You save for a(n) ________ when you don‘t have the cash to buy it now.
Principal
Time Value of Money
Large Purchase
Compound Growth
________ deals—such as 90-days-same-as-cash—are often used to get you to buy higher-priced items.
Rate of Return
Interest Rate
Compound Interest
Inflation
The _______ refers to the earning potential of money.
Time Value of Money
Large Purchase
Compound Growth
Rate of Return
The First Foundation is: Save....
A $5,000 emergency fund.
A $500 emergency fund.
A $1,000 emergency fund.
A $10,000 emergency fund.
Which of the following would be considered an emergency fund expense?
Lost cell phone
Video game sale
Blown car tire
Sale on shoes
”Rate of return“ is a phrase used to describe what aspect of investing?
Compound growth
Accrued interest
Risk and return ratio
Inflation
In The Five Foundations, what is The Third Foundation?
Pay cash for college
Save a $500 emergency fund
Pay cash for your car
Get out and stay out of debt
When you make a purchase but later wish you hadn‘t done so, you experience . . .
Selfishness
Buyer‘s remorse
Impulse purchase
Time value
Which of the following questions helps you determine if something is actually an emergency expense?
Is it urgent?
Is it unexpected?
Is it necessary?
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
47% of Americans have less than $1,000 saved for a(n):
Emergency Fund
Accrued Interest
Principal Time
Value of Money
What is a reason for why so many Americans live paycheck-to-paycheck?
Many people are paying themselves first and then spending
Many people only buy what they NEED, not what they WANT
Many people impulse shop
Many people spend within their budget
You'll have less freedom with your money if you . . .
Invest in the stock market
Are paying for things in your past
Put money in a bank account
Make less than $35,000
The first step you should take when you want to make a large purchase is . . .
Ask your parents to loan you the money with low interest
Get a new credit card
Decide how much you'll need to save and the time frame you want to save it
in
Sell something and use the proceeds
The best way to build wealth is to start investing early. You should start investing money . . .
As soon as you have extra cash
Once you have a fully-funded emergency fund
Once you're out of college, living debt-free, and have 3–6 months of living
expenses saved
When the stock market is performing really well
Why do some accounts, like savings accounts at your local bank, earn interest?
Because you deposit money, adding to your principal each month
Because the bank pays you to use your money
Because of inflation
Because those accounts always have great interest rates
The only place you should keep your emergency fund money is:
A savings account or money market account.
A safe in your bedroom
A Roth IRA
An envelope in a safe place
Which two habits are the most important for building wealth and becoming a millionaire?
Working a high-paying job and relying on a trust fund
Investing into the right stocks and using a private CPA
Consistently investing money and patience to give it time to grow
Always paying off your credit card on time and putting extra money into a retirement account
You should budget in this order: giving, savings, spending.
True
False
Why do stores rarely advertise the full price of big purchases like smartphones?
They are trying to keep their prices competitive.
Hiding the full price allows stores to change their pricing as the market fluctuates.
By showing you only the monthly payment, they make the product seem affordable.
They are trying to cheat you.
Compound interest is earned at a fixed rate, while _____ is an average based on an investment's past performance.
The principal
Interest rate
The Fifth Foundation
Compound growth
Once you're out of school, have started your career, and have zero debt, your
emergency fund should have _________.
3–6 months of income
3–6 months of living expenses
$3,000
$5,000
What is the Third Foundation?
Pay cash for your car.
Pay cash for college.
Save for retirement.
Create a monthly budget.
The top three careers reported among millionaires were _____________,
_____________, and ___________.
Pro athletes; bankers; CEOs
Lawyers; surgeons; accountants
Celebrities; developers; writers
Accountants; engineers; teachers
The amount of interest charged on a debt but not yet collected is called...
Accrued interest
Interest rate
Same-as-cash
Growth rate
Which principle says that a certain amount of money today is worth more than
the same amount in the future?
Inflation
Rate of return
The time value of money
Principal interest
