WorksheetsPersonal Finance- Managing personal finance
Total questions: 20
Worksheet time: 11mins
Which of the following is NOT a type of borrowing for an individual?
Mortgages
Credit cards
Premium bonds
Personal loans
What is the main purpose of an overdraft?
To save money
To invest in real estate
To fund short-term cash shortages through the current account
To earn interest
What is a key advantage of using an overdraft?
It is only available for large amounts
It requires a long-term commitment
It allows borrowing only when needed
Only pay interest on the amount borrowed
What happens to the ownership of the item if all installments of a hire purchase are not paid?
The consumer gains ownership
The seller or lender retains ownership
The item is destroyed
The item is donated
What is an advantage of payday loans?
Solves long-term financial problems
Quick access to funds when required
Low interest rates
No need for repayment
What is a key feature of payday loans regarding interest?
Interest rates are low
Interest rates are high
Interest is not charged
Interest rates are fixed
What is a financial issue that payday loans can solve?
Long-term debt
Short-term cash flow problems
High savings
Investment losses
Isabelle is considering opening an ISA. What is the purpose of an ISA?
To act as an incentive to save and earn interest tax free
To provide instant access to funds
To offer high-risk investments
To allow unlimited spending
Anaya has a savings account where she deposits money regularly but makes no withdrawals. What is the effect of interest received on her savings?
Decreases the value
Increases the value as result of compound interest
No effect
Causes penalties when money is paid in
What is the purpose of moving money from a saving account to a current account?
To avoid fees
To earn more interest
To enable withdrawal at an ATM
To close the account
Amelia is considering investing in premium bonds. What are three key features of premium bonds?
Opportunity to win upto £1 million through monthly draw
Maximum holding limit set at £50,000
Maximum limit is £40,000
Money invested is 100% safe
Mia is considering investing in shares. What is her main objective?
To receive interest payments
To receive income in the form of dividends
To lend money to the government
To avoid taxes
Muhammad is considering investing in shares. What is a financial benefit he might gain from this investment?
Guaranteed fixed interest
Sell the share at a higher price to make a gain
Ownership of a business
Immediate repayment
Arthur is considering different features of pension plans for his retirement. Which of the following is NOT a feature of pensions?
Tax exemption
Immediate cash withdrawal
Future income planning
Lump sum payment option
Isabelle is considering investing in shares. What is a potential risk she might face?
Loss of initial investment
Immediate liquidity
Guaranteed profit
Fixed interest rate
Benjamin is considering opening a high-interest savings account. What is the primary benefit he can expect from this type of account?
Unlimited withdrawals
No need for a bank account
Higher returns on savings
Immediate access to funds
Eva is considering opening a fixed deposit account to save her money. Which of the following is a characteristic of a fixed deposit account?
Penalty for early withdrawal
Unlimited deposits
Instant access to funds
Variable interest rates
Sarah is thinking about transferring a balance of £5000 from her current credit card to a new card that offers 0% interest for 15 months with a 3% handling fee. What are the two benefits of this offer?
No interest charges for 15 months
Immediate reduction in debt
Increased credit limit
Spread the repayment over 15 months to pay off the debt.
John is considering transferring a balance of £3000 from his existing credit card to a new card that offers 0% interest for 12 months with a 2% transfer fee. What are two potential disadvantages of making this transfer?
If the £3000 balance is not repaid in 12 months the high interest charge will apply
Immediate increase in available credit
One-time transfer fee is an additional cost
Lower interest rate after 12 months
How to improve credit score to ensure eligibility for future borrowings? Select all that apply.
Avoid moving house frequently
Use a credit card and ensure the balance is always paid off at the end of the month
Register on the electoral list at the local register office.
Obtain British citizenship
