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WorksheetsPERSONAL FINANCE STUDY GUIDE
Total questions: 54
Worksheet time: 27mins
Megan's mother suggested that she was experiencing the consequences of her trade-off regarding a decision she made to purchase a dress for prom. Which situation does Megan most likely find herself in for her mother to have made this comment?
Megan went shopping and found the prom dress of her dreams and purchased it using money she had saved for it PLUS most of the money she had saved for replacing the tires on her car. Now she needs tires and is short cash to buy them.
Megan found the prom dress she likes a lot. She checked online and found a coupon that enabled her to save 30% when she purchased the dress.
Megan went shopping and found six prom dresses that she liked a lot. After much deliberation, she chose the dress that was the least expensive of the 3 she liked best.
Megan went shopping for her prom dress at the store her mom recommended. She found two dresses she liked a lot. Megan purchased the one that was the most comfortable even though it cost $28 more than the other one.
What is the correct sequence for the five-step decision-making process?
develop a timeline; set goals; gather information; analyze information; implement and evaluate the plan.
set goals; analyze information; create a plan; implement the plan; monitor and modify the plan
set goals; gather information; develop a timeline; implement and evaluate the plan
gather information; analyze information; set goals; develop a timeline; implement and evaluate the plan
Ian has been shopping for a different vehicle for the past several months. He needs something reliable and would really like something with a nice sound system. He and his parents have talked about how much he can afford and he plans to stay within the price guidelines he and his family have set. Ian was analyzing the opportunity cost of a trade-off regarding which car to purchase. Which situation best represents what he might be thinking through?
Ian is comparing new vehicles at two car dealerships. He was able to find nearly identical cars at nearly identical prices. One dealership is 20 miles away and the other dealership is 30 miles away.
At a local dealership, Ian has found two different cars that meet his needs. The first car has a better sound system than the other. The second car has 20,000 fewer miles on it.
Ian has been shopping for a vehicle online. He finds something that would meet his needs being sold by an individual near him. He would be able to purchase this car for less than he would have paid for a comparable vehicle at a car dealership
Ian's older brother is trading vehicles and offers to sell Ian his used vehicle. This vehicle would meet Ian's needs and he knows the service history of the vehicle is excellent.
Jake's credit application has been declined because of his negative credit history. Which statement is most likely to be true?
Jake pays his bills consistently and on time.
Jake has applied for 4 credit cards and a car loan in the past 6-weeks.
Jake has received 3 traffic tickets in the past two months.
Jake holds 2 store credit cards, a bank credit card, a car loan, and a mortgage in current standing.
Which of the following is LEAST likely to impact your chances of getting a job after college graduation?
The net price you paid for your college degree.
How many job openings exist in the major you choose.
How well you perform in the core classes for your college major.
How many other people in your geographical location have the same degree and are interested in the same job.
How much on-the-job experience or internships you've participated in.
Which of the following is a major factor in helping you achieve your financial goals?
your job choice
the amount of overtime you work
your ability to balance work and personal life
where you live
Which is an example of an opportunity cost related to earning potential?
Reduced income by cutting back on work hours to have time to attend classes at the local community college.
Apply for a scholarship to pay for college tuition and a new computer.
Improve time management skills.
Decide on a career that fits into you desired lifestyle.
The total amount of your pay and allowances before taxes, etc.?
Gross Pay
Net Pay
Actual Pay
Income
This is what is left after taxes and other deductions, "your take-home pay".
Gross Pay
Net Pay
Actual Pay
Income
Wages, dividends, tips, commission, and pay transfers are all?
Expenses
Debts
Cash
Income
The skills, education, experience, and training you possess/acquire are considered your?
your resume
your human capital
your attributes
your personal profile
If your bills exceed the amount of money you make, you must?
Increase your income
Decrease what you are paying for
Increase your income and decrease your obligations
Pay what is most important first
Peggy has worked 40 hours in each of the following two weeks. If she earns $12.71 an hour and is paid every two weeks, what would her gross pay for the two-week period be?
$510.00
$508.40
$1018.60
$1016.80
If you have a gross pay of $1,016.80 and total deductions of $217.90, what is the net pay?
$292.10
$290.50
$800.70
$798.90
Pre-tax income/withdrawals are NOT part of your taxable income.
true
false
What does the Federal Insurance Contributions Act (FICA) include?
Thrift Savings Plan
Federal Income
Social Security and Medicare
Individual Retirement Account (IRA)
During her first year on the job, Tammy earned $22,880 in annual salary ($11.00 an hour). She started the job with paid leave for five vacation days and five sick days. Plus, her employer pays $300. a month for health insurance premiums. What is Tammy's total annual compensation?
$22, 880
$27,580
$26,480
$30,880
What percentage (%) of net income should go into savings?
5%
10%
15%
20%
Your electric bill is $102.00 this month and is characterized as...
Variable Income
Fixed Income
Variable Expenses
Fixed Expenses
You are on vacation in Mexico and decide to purchase a hammock. The SAFEST method of payment would be ...
Cash
Check
Debit Card
Credit Card
Which would you pay less interest on, a 30-year mortgage or a 15-year mortgage?
15-year mortgage
30-year mortgage
Doesn't matter, they would be the same.
It only depends on your lending institution.
You need a car for college to travel back/forth to your home 150 miles away. You have a budget of $5,000, and work a part-time job to pay for gas and insurance. Which of the following would be your BEST option for the money and reasons you have?
2010 Mini Coupe - $4,800 – 75,000 miles – 28 mpg
2012 Chevrolet Impala - $4,995 – 87,536 miles – 18 mpg
2014 Ford Focus - $4,900 – 44,121 miles – 30 mpg
2014 Chevrolet Cruze - $4,494 – 81969 miles – 29 mpg
Calculate your check register balance with the following information: Starting Balance: $255.00 Deposits: $40.00 and $20.00 Check #1020: $45.00 Check #1021: $10.50 Check #1022: $14.00 Check #1023: $123.00
$102.50
$122.25
$122.50
$125.20
You plan on completing your college degree in 4 years after high school. Which type of degree should you have earned?
Associate Degree
Bachelor Degree
Master Degree
Specialist Degree
you plan on completing your college degree in 4 years after high school. Which type of goal will you have completed?
Short Term Goal
Medium Goal
Fixed Goal
Long Term Goal
Using the rule of 72, if I invest my money at a 8% return, how long will it take me to double my investment?
9 months
12 months
9 years
12 years
Using the Rule of 72, if I invest my money at a 6% return, how long will it take me to double my investment?
8 months
9 months
9 years
12 years
Which of the following types of saving instruments will you be penalized if you withdraw money before the maturity date?
Bank/Credit Union Savings Account
Music CD
Certificate of Deposit
Bank/Credit Union Checking Account
Which of the following types of savings instruments would pay you the HIGHEST interest rate on your savings?
Bank Savings Account
Certificate of Deposit
Credit Union Checking Account
Credit Union Savings Account
A type of credit score that makes up a substantial portion of the credit report that lenders use to assess an applicant's credit risk and whether to extend a loan. This is an acronym for the Fair Isaac Corporation, the creators of this score.
FICO
FICA
SEC
EPA
This report is a record of your bill payment practices and history.
Credit Report
Credit Score
Credit Card Statement
Bank Statement
What is the amount you borrow referred to as?
Interest
Loan Value
Principal
Loan Amount
What is the simple interest formula?
Interest = Loan Amount x Interest x Years (I=L x I X Y)
Interest = Principal x Rate x Time (I=P x R x T)
Principal = Rate x Years x Interest (P=R x Y x I)
Rate = Interest x Time x Principal (R=I x T x P)
What is the cost of borrowing money referred to as?
dividends
capital gains
principal
interest
What is the difference between a debit card and a credit card?
They are the same; there is no difference.
Debit cards use your money and a credit card uses (interest loan) the banks money
Credit cards have higher interest than debit cards.
Credit cards create more of a risk for identity theft.
Who does the Truth and Lending Act protect?
Lenders
Banks
Consumer / Borrowers
Both lenders and consumers
What is the total interest on a $40,000 loan, at 5% interest, for 72 months?
$14,000
$1,440
$1,200
$12,000
What is the total amount to be repaid on a $40,000 loan, at 5% interest, for 72 months?
$52,000
$54,000
$41,440
$41,200
What is the maximum you can/should borrow (The Rule)?
As much as you can afford.
20/10 Rule: no more than 10% of your monthly income or 20% of your annual income
20/10 Rule: no more than 20% of your monthly income or 10% of your annual income
The Rule of 72
This is your personal property pledged for a loan? If you don't pay the loan this will be surrendered to or confiscated by the lender.
Interest
Capital
Principal
Collateral
With a credit card, if you pay more than your minimum payment ...
You will pay the balance off faster and pay less total interest.
You will pay the balance off faster and pay the same interest.
You will pay the same amount, once they start compounding interest.
You will pay less interest, but you will still have to make the same number of payments.
Which would cost more per month (higher payment), a 30-year or 15-year mortgage at the same interest rate?
a 15-year mortgage
a 30-year mortgage
They would be the same
It depends on the mortgage company
Which would you pay less total interest on, a 30-year mortgage or a 15-year mortgage?
They would be the same
The 15-year mortgage as the shorter-term = less interest over the life of the loan
the 30-year mortgage as your monthly payments are much less.
It depends on the lender.
Credit experts recommend that you check the status of your credit reports at least?
weekly
daily
monthly
once each year
This is a way for you to buy something now and pay for it later?
debit
capital
payday loan
credit
One of the benefits of buying car insurance is ...
If you have insurance and are pulled over for speeding, you won't get "points" on your license.
if you pay your premium on time every month, you won't have to pay anything extra if you are in an accident.
If you are in an accident, the other driver cannot sue you if you have car insurance.
If you are in an accident and another driver is injured, your insurance will cover his/her medical bills up to the policy limits.
What factor influences automobile insurance rates?
Personal Health
Contents of Car
Driving Record
Color of Car
Cleo gets a text message from her credit card company asking her to verify that she's making a purchase at a high-end department store in NYC. Cleo's at work in Chicago and texts back a (2) for NO. What should be her next step?
Cancel that credit card account immediately and open another one in its place.
No need to do anything else - the problem's taken care of.
Check her online account and review all the purchases to make sure there aren't other fraudulent charges.
Switch to using her debit card from now on until the credit card problem resolves itself.
Eric wants to buy a new house, and to do so he needs good credit. He has made all his rent, car, and credit card payments on time, so he should have a good credit score. Before he goes to purchase the house, he checks his credit report and finds that he has a low credit score because one of the agencies mishandled his report. This example shows the importance of ...
buying a house
validating credit history
paying rent on time
good credit
What can you do to prevent identity thieves from getting your personal information?
Shred or tear up important financial documents.
Review your credit report every five years.
Pay the entire balance on credit cards monthly.
When borrowing money, insist on a fixed-rate loan.
Which of these saving/investing options has the highest risk?
stocks
savings accounts
U.S. Government Bonds
Money Market Accounts
Holding a variety of investments to reduce risk is known as:
Avoiding Risk
Dollar-Cost Averaging
Systematic Saving
Diversification
The basic rule of a risk-to-return relationship is that ...
the lower the risk, the higher the rate of return.
The higher the risk, the higher the rate of return.
The higher the risk, the lower the rate of return.
The two issues are not related.
Kendra just received a promotion with a nice raise. She has her spending plan under control, so she decides to adjust her long-range investing plan now that she can take on more investment risk. Which one of the following types of investments potentially has the HIGHEST RISK and is most likely a higher rate of return for Kendra?
Government Bonds
Money Market Deposit Account
Savings Bond
Stocks
