WorksheetsAlabama Financial Literacy Test
Total questions: 20
Worksheet time: 10mins
Which of the following statements best describes gross pay?
Amount of money one receives from insurance after an illness or accident
Amount of money one receives from their job before taxes or other deductions are taken out
Amount of money one receives from their job after taxes or other deductions are taken out
Amount of money one earns from their job by overtime, bonuses, and reimbursements
Which of the following financial institutions receives criticism for targeting people in poverty and other vulnerable populations through charging extremely high interest rates?
Pawn shops
Check cashing services
Credit unions
Payday lenders
Which of the following purchasing cards removes funds from one’s checking account almost instantly after one makes a purchase?
Credit card
Debit card
Payroll card
Withdrawal card
All of the following are advantages of bundling insurance EXCEPT what?
Convenience
Increases insurance options
Less complicated
Potential saving of money
Which of the following positions can confirm signatures to a contract?
Executive
Legal signer
Notary public
Trustee
When eating at a restaurant, one must consider which of the following additional costs to the price of their meal and sales tax?
Interest fee
Reservation cost
Service fee
Tip
Which of the following best describes the concept of APR?
Summary of all credit card transactions in one month
The maximum amount one can charge on their credit card
The fee charged if a credit card payment is late
The credit card interest rate, calculated on a yearly basis
Which of the following is the form an employer provides to an employee to inform them of how much money was deducted from paychecks in a given year?
W-4
I-9
W-2
W-9
If one spends more money than they have in their bank account, they are charged a what?
Debt fee
Maintenance fee
Overdraft fee
Reserve fee
When seeking to open a bank account, which of the following is needed?
Blank checks
Government-issued identification
Recommendation letter
School transcript
Rent-to-own agreements can negatively impact consumers because:
Consumers do not have to pay cash for the item
Consumers will pay a high interest rate on the item
Consumers can immediately have access to the item
Consumers are limited from purchasing similar items
Which of the following is a financial institution that handles money, including keeping it safe for saving or commercial purposes?
Payday lender
Bank
Check cashing service
Pawn shop
The Rule of 72 is used to calculate what?
The amount of time it will take for an investment to double in value
The amount of money one should save by retirement
The amount of taxes owed for every $72 invested
The amount of credit one needs for a good credit report
What is the term used to describe interest earned on interest gained?
Compound interest
Simple interest
Principal
Capital
Which of the following practices could negatively affect one’s credit score?
Reaching the spending limit on one’s credit account
Paying bills on time
Monitoring one’s credit report
Protecting against fraud and identity theft
Banks offer the service of a safety deposit box, which can be used for what?
Guarantee high interest on money deposits
Reduce the amount owed on late fees
Prevent the bank’s money from being burned in a fire
Protect personal documents from potential loss
The purpose of an umbrella insurance policy is best summarized as what?
Cover costs associated with heavy rain
Groups all insurance policies into one discounted price
Protect the holder against liability costs beyond what is covered by other insurance
Uses one insurance policy to cover each member of a family
When the federal government raises interest rates, which of the following is generally impacted positively for a consumer?
Credit card payment
Real estate investment
Savings account
Stock investment
Which of the following is the typical amount of time in which a borrower must pay off a mortgage loan?
Five (5) years
Eight (8) years
Thirty (30) years
Fifty (50) years
If the value of one’s house increases, all the following will most likely rise EXCEPT:
House insurance
Escrow payment
Mortgage principal
Property tax
