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WorksheetsPersonal Finance Final Exam
Total questions: 47
Worksheet time: 24mins
Which of these costs would be the MOST difficult to adjust if you were looking to reduce your expenses?
Dining
Expenses
Buying a TV
Loan payment on a new car
Leila just graduated from college and is comparing a few different cities to move to. Which of these factors is the LEAST important thing for her to consider right now?
Average cost of uber, lyft, or taxi
Food and grocery store options in the area
Employment opportunities
Average rent
You are putting together your first post-graduation budget. Your take-home pay will be $2,500 per month. You estimate your monthly costs to be rent of $900, car related expenses to be $550, entertainment of $200, food expense of $250, cable bill of $75, mobile phone of $100, student loan payment of $400 and other expense of $150. How would you describe your budget after analyzing all of your income and expenses?
You have a surplus of $125.
You have a deficit of $125.
You have a deficit of $2,625.
You have a surplus of $2,500.
You overhear your cousin talking about the importance of creating and sticking to a budget. Which of the following reasons he gives below is actually FALSE?
A budget can help you identify any bad spending habits.
Using a budget can allow you to work towards your financial goals.
Having a budget can help you create an emergency fund.
Using a budget can qualify you for special discounts at your favorite stores
Which statement accurately describes how the 50/20/30 Rule would break down your take-home pay?
50% on flexible expenses, 20% on financial goals, and 30% on living expenses and essentials
50% on financial goals, 20% on living expenses and essentials, and 30% on flexible expenses
50% on living expenses and essentials, 20% on financial goals, and 30% on flexible spending
50% on financial goals, 20% on flexible expenses, and 30% on living expenses and essentials
You are starting your first job and you are asked to complete some paperwork on your first day. Which form will determine how much money is withheld from your paycheck for federal and state income taxes?
W-2
W-4
I-9
1040
Which of the following have typically been the three largest categories of federal government spending?
Infrastructure, Defense, and Science
Health, Military, and Interest on Debt
Veterans, Infrastructure, and Education
Education, Defense, and Food/Agriculture
What does the term "withholding" mean in reference to your paycheck?
It is the amount of your paycheck that you are NOT being taxed on.
It is how much is being taken out of your paycheck in taxes.
It is how much you are going to owe the government when you file your annual tax return.
It is how much you earn and includes salary, bonus and commissions.
Which of the statements below is TRUE about filing your taxes, assuming your only income comes from the salary you earn at BigTech Company?
You need to file your tax return by the end of the calendar year (typically December 31st)
If your employer takes out federal income taxes through payroll withholdings, you do not need to file a tax return
You must file your tax return by the deadline (typically April 15th of the following year) or request an extension by that date
You do not need to pay any income taxes until April 15th, so you should ask your company to wait until after that date to withhold any money
Juanita has a part-time job that pays $12/hour and works about 50 hours every month. Her withholdings are Social Security (6.2%), Medicare (1.45%) and federal income tax (10%). What is her approximate net pay?
$120
$500
$600
$700
Which of the statements about this W-4 is TRUE?
Mr. Khan is filing as married filing jointly.
Mr. Khan’s paycheck will have less money withheld from his paycheck since he is claiming a dependent.
Mr. Khan is requesting for an additional $50 to be withheld from his paycheck.
Mr. Khan submitted this W-4 two days after he started working at Little Company Inc.
Which of the following statements about this W-2 is true?
Avia Consulting will use this W-2 to file their 1040 form
Lily paid state income taxes of $1,189.90
Lily earned about $117,000 over the year based on the total of her Wages, Social Security wages, and Medicare wages
Lily works in the same city that Avia Consulting is based in
Akshay worked at a cafe while he was a college senior in Boston, Massachusetts. After graduating in June, he moved back to his home in California and started a full-time job in September. Which of the following statements is true?
Akshay will need to file only a federal tax return.
Akshay will need to file a federal tax return and a state tax return for Massachusetts.
Akshay will need to file a federal tax return and a state tax return for both Massachusetts and California.
Akshay will need to file a federal tax return this year and file state returns the following year.
You are at the checkout counter at the local supermarket and use your debit card to pay for your groceries. Where does the money for this purchase come from?
Your credit card company covers the cost
It is deducted directly from your checking account
Your credit card company provides you with a cash advance to cover the cost
It is deducted from your credit card account
Which of the following is a way to access the money in your checking account?
Taking out cash using your credit card at an ATM machine
Using your debit card to pay for groceries at the checkout
Depositing a paycheck at an ATM
Receiving a person-to-person payment from your friend
FDIC Insurance is…
Optional coverage consumers can purchase so that their bank deposits remain safe.
Insurance bank branches can buy to protect their business against fraud and scams.
Required if you want to do online or mobile banking.
Protection for bank customers’ deposits up to $250,000, guaranteeing their money is still available if the bank goes out of business.
Jillian is a high school student who typically earns $275 every two weeks at her part-time job. She is responsible for paying her own cell phone bill, gas when she drives her mom’s car, and costs of going out with friends. She wants to set a low balance alert. What amount probably makes the most sense for Jillian?
$5
$50
$500
$5000
Which of the following is TRUE about checking accounts?
They must pay an interest rate of at least 1% annually
Banks cannot change the fee policies on your account while it is open
Banks can only change the fee policies on your account once per year, between Jan 1 and Jan 31st
Banks can change the fee policies as long as they put the changes in writing and notify you
Fill in the blanks: Direct deposit typically refers to your ______ sending your ______ electronically to your bank account.
employer, bills
employer, paycheck
parents, allowance
state government, taxes
Which of the following is a TRUE statement about check cashing stores?
Their checking accounts typically cost less than traditional bank accounts
They tend to charge consumers a lot of hidden fees
Customers use check cashing stores even though the employees are unfriendly and often make customers feel embarrassed or out-of-place
They make their money by charging fees for transactions that can be done for free by customers with a traditional checking account
Fill in the blanks: Direct deposit typically refers to your ______ sending your ______ electronically to your bank account.
employer, bills
employer, paycheck
parents, allowance
state government, taxes
Which of the following is a TRUE statement about check cashing stores?
Their checking accounts typically cost less than traditional bank accounts
They tend to charge consumers a lot of hidden fees
Customers use check cashing stores even though the employees are unfriendly and often make customers feel embarrassed or out-of-place
They make their money by charging fees for transactions that can be done for free by customers with a traditional checking account
Which of these statements about saving is INCORRECT?
People often believe they are saving when they buy products at a listed discount, even if they didn't need the product in the first place
It is extremely difficult to open a savings account, as you typically need at least $10,000 for your initial deposit
Without a separate savings account to pay yourself first, it's more likely that you'll spend all of your income each month
Billions of dollars are spent on marketing to persuade consumers to spend money instead of saving it
You are 18 years old, opening your first savings account, and are considering three options:
BANK A is not FDIC insured, has an interest rate of 5%, and a minimum deposit of $25.
BANK B is FDIC insured, has an interest rate of 0.01%, and a minimum deposit of $50.
BANK C is FDIC insured, has an interest rate of 0.02%, and a minimum deposit of $10,000.
All three have fees competitive with other banks. Which bank is the best option?
Bank A
Bank B
Bank C
All 3 banks are equally good options
When a bank says their savings account earns 1% interest, that typically means you will earn 1% interest over what period of time (Note: this is not referring to the compounding frequency or frequency of interest payment)?
Daily
Monthly
Quarterly
Annually
Which of the following is an effective strategy for personal saving?
Wait until the end of the month and save whatever is left in your checking account
Save a certain percentage of each paycheck and deposit it directly into a savings account
Cover all of your wants and needs and save whatever is left over
Take out a payday loan so you can save before you receive your paycheck
You want to take earnings from your part-time job to pay for a new laptop. Your monthly take-home pay is $500 and the laptop costs $1,200. What percentage of your pay do you need to save in order to buy the laptop in 12 months?
5%
10%
15%
20%
Which statement best describes the difference between saving and investing?
Saving is done with small amounts of money, and investing is done with large amounts of money
Saving protects your money from inflation while investing does not protect your money from inflation
Saving is for low-income people, while investing is for rich people
Saving goes into an FDIC insured bank while investing typically goes into stock or bond markets
Your sister Raegan has her paycheck direct deposited into her checking and savings accounts each pay period. She asks you how she should split her paycheck between the two accounts. What is the best advice you could offer her to encourage her savings habit?
Direct deposit the full amount of the check each month into her checking account and then decide later how much to put into savings
Add at least 95% of her paycheck to her checking account and 5% to her savings account because you know that saving is hard for her
Add at least 10-20% of her paycheck to her savings account and the remaining 80-90% to her checking account
Do not have her paycheck direct deposited since it is NOT a secure way to transfer money
Three of these statements best describe a checking account. Which statement best describes a savings account?
This account offers a convenient way to pay bills and access cash from an ATM
This account pays you interest on money you have put away for later to help your money grow
This account is automatically debited when you use a debit card
This account typically allows an unlimited number of transactions per month
Each of the following financial products will help you build a credit history EXCEPT…
Secured credit card
Debit card
Auto Loan
Credit card
Which of the following statements below is TRUE?
The cardholder is carrying a balance over from the last period.
The cardholder was charged interest on her balances for the last period because she made her payment on time.
If the cardholder makes her minimum payment of $35.00 by the due date, she will NOT be charged interest on her balances.
If the cardholder pays $523.20 by the due date on the bill, she will pay NO interest to the credit card company.
Based on her current balance, how much credit does this cardholder have available to use?
$0
About $500
About $1,600
$2,100
The shorter your term length, the _______ your monthly payments, and the _______ the total interest you will pay.
higher, lower
higher, higher
lower, lower
lower, higher
Which of these credit payback strategies would lead to the HIGHEST interest charges?
Paying off your credit card bill in full every month
Paying 20% of your credit card balance every month on time
Making the minimum payment (3% of your credit card balance) every month on time
Making the minimum payment (3% of your credit card balance) every month with an occasional late payment
Select the statement below that accurately describes a characteristic of a credit card.
You owe the same payment every month
You must have money deposited into a checking account to use the credit card for purchases
Making full payments on time every month is the only way to avoid interest charges
They do not charge interest
As a young adult, all of the following are good strategies for building credit, EXCEPT:
Open a credit card, with your parent or guardian as a cosigner
Open a checking account, and start using a debit card
Become an authorized user on a credit card used by your parent or guardian
Open and use a secured credit card
What are the two most important factors in calculating your credit score?
Payment history and types of accounts
Amounts owed and length of credit history
Payment history and amounts owed
Length of credit history and new credit inquiries
Heather receives a phone call, in which an automated voice states that her credit card has been used fraudulently and that she must enter her 16-digit credit card number, using the keypad of her phone, to clear up the error. What should Heather do next?
Push 0 or say "operator" to speak with a representative from the credit card company instead.
Enter the 16-digit card number, but don't enter her PIN or the 3-digit code from the back of the card.
Hang up and wait for the end of her credit card billing cycle to see if there really was a fraudulent charge.
Hang up and call her credit card company using the 1-800 number on the back of her card to inquire about the issue or report the attempted phone fraud.
All of the following would show up on a credit report EXCEPT…
Salary of your current job
Payment history of your car loan
Credit card payment history
Student loan activity
Melvin is 19 years old and wants to begin establishing a credit history. Which action should he take to meet that goal?
Always say "credit" when asked "credit or debit?" at a store.
Ask his parents to cosign a credit card or add him as an authorized user on their credit card.
Any time he borrows money from a friend or family member, be sure to pay it back promptly.
Take out some private student loans, even though he doesn't need them because he has grants and scholarships.
I forgot to pay my credit card bill one month. For how long will that payment information show up on my credit report?
Once I make the payment, it will disappear
One year
Seven Years
Ten Years
Why do so many people continue to use payday loans despite the financial risk?
Payday loans usually come with much lower interest rates.
Consumers need quick access to money that is not provided by other financial institutions.
Payday loans are low-balance loans, so they are very easy for most borrowers to repay
If paid back on time, payday loans can significantly increase your credit score.
Which of the following could have a NEGATIVE impact on your credit score?
Paying your bills on-time
Paying down balances on your credit card accounts
Decreasing your utilization of credit
Applying for multiple credit cards in a short period of time (e.g., a week)
What is the best advice to prevent identity theft?
If you check your three credit reports every year, it's almost impossible to become a victim of identity theft.
Avoid buying anything online, as that's how 90% of identity theft occurs.
Be careful with your credit and bank account numbers, create strong passwords, and beware of phishing emails.
Use a debit card instead of a credit card whenever possible.
Which response best completes the sentence "It's best to begin establishing credit when you're young because ________" ?
Interest rates will only continue to go up as you get older.
You need a credit history and report to qualify for Federal student loans.
Credit scores are free for anyone under the age of 25.
You will likely need a credit history to rent your first apartment, finance your first car, or open an unsecured credit card.
How can your credit score impact your financial situation?
Consumers with high scores can borrow and those with low scores cannot.
Consumers with low scores get lower interest rates on loans than those with high scores.
Your credit score can determine whether you are approved for a loan and what the interest rate on that loan will be.
It generally has no impact on your financial situation.
