WorksheetsFinancial Math Midterm
Total questions: 55
Worksheet time: 28mins
You should always make sure you have a…
Budget
Credit line
Direct deposit
Credit card
What is The First Foundation?
Pay cash for college
Build wealth and give
Save a $500 emergency fund
Open a checking account
A money principle to keep in mind is to live on ____ you make.
Exactly 20% below what
More than
The same as
Less than
To know your net worth, subtract your liabilities from you ____.
Other liabilities
Net income
Previous net worth
Assets
If your assets total more than your liabilities, you will have a(n) ____ net worth.
Negative
Equal
Positive
Unknown
When you set financial goals, they should be…
Timely, bank-based, specific, and yours
Specific, measurable, time-sensitive, yours, and written
Specific and measurable
Only time-sensitive
Personal finance is 20% ____ and 80% ____.
Head knowledge; behavior
Behavior; head knowledge
Cause; effect
Reactions; behaviors
What is The Fifth Foundation?
Pay cash for your car
Get out and stay out of debt
Find a financial professional
Build wealth and give
Which of the following is NOT a component of a budget?
Credit score
Saving
Income
Giving
What are the Four Walls?
Utilities, college fund, restaurants, and car insurance
Cell phone bill, car insurance, shelter, and money for the movies
Food, utilities, and college fund
Food, utilities, shelter, and transportation
How many categories should you have in your budget?
15 or more
No limit; use as many as you need
No more than 10
At least 3
How often should you create a budget?
Daily
Weekly
Monthly
Biannually
What does a budget show you?
How much you need to save
How much money you plan to come in and go out during the month
How much money you need to earn
How much money you spent last month
Detailed categories on your budget will help you make better spending decisions.
True
False
Going to the movies is an example of what types of expenses?
Intermittent and variable
Discretionary and variable
Discretionary and fixed
Intermittent and fixed
Net income is the amount you get paid before taxes.
True
False
Your monthly rent payment is an example of a variable expense.
True
False
45% of Americans have less than $1,000 saved for a(n)…
Emergency
Car
Retirement fund
New smartphone
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
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 those accounts always have great interest rates
Because of inflation
It’s not IF an emergency will happen, but…
How
Where
Why
When
The interest rate on a savings account determines…
How much money you need to have to open the account
How much you will pay the bank to manage the account
The amount of time your money will be in the account
How quickly your money will grow over time
_____ is a millionaire’s best friend.
Accrued interest
Compound growth
High returns
Profit sharing
The purpose of an emergency fund is to…
Be able to cover an unexpected expense with cash and protect you from having to pile up debt when something goes wrong
Teach you how to invest in growth stock mutual funds
Have some extra money in a checking account in case you need to transfer some to your spending categories
Teach you discipline – saving is purely a good exercise in self-control
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
90% of millionaires make over $100,000 a year.
True
False
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
Banks and lenders use credit scores to determine…
The likelihood that someone is able to repay debt
A person’s financial responsibility
How much collateral someone has available to put up for a loan
How successful someone is
Making purchases with a credit card means that you’re borrowing money with interest, and _____ pay much higher interest rates.
Young people
Rich people
Old people
College graduates
When you finance a new car, you will end up paying more than the sticker price.
True
False
_____ require the borrower to put up collateral for the loan.
Unsecured loans
Interest rates
Revolving credit
Secured loans
Which of the following is part of the formula that determines a person’s FICO score?
Their income level during a one year period
The percent of income that they invest into mutual funds
The dollar amount in their savings funds
Their history of payments made to lenders
Leasing a car is a method of financing where someone ____.
Makes monthly payments on but does not own the vehicle
Is paying off two or more vehicles at one time
Does not have to pay any taxes on the vehicle for the first six months
Never pays any interest or fees
What is The Second Foundation?
Get out and stay out of debt
Save a $500 emergency fund
Pay cash for your car
Build wealth and give
Credit card companies make the most profit from ____.
Incentive programs with banks
Partnering with companies to offer rewards to customers
Government tax breaks
Charging interest to customers who only pay part of their monthly debt
Which is an example of an appreciating asset?
A computer used for business purposes
A new car purchased within the past 6 months
A piece of farming equipment
A home
Car lease agreements come with a stipulation that you must pay a penalty if you ____.
Go over the pre-established mileage cap
Drive the car out of state
Don’t park under a garage
Don’t wash the car before returning it
A credit score is an indicator of how well someone pays off their debt, not how well they handle money.
True
False
When you buy with credit, you typically spend more than you would with cash or a debit card.
True
False
A car is a depreciating asset.
True
False
Credit card companies charge stores a 2–3% fee for every purchase made with credit cards. This is called a(n)…
Merchant fee
Cash advance fee
Annual fee
Over-the-limit fee
The _____ is the total amount of the car loan, plus taxes and fees.
Principal
Value
Interest
Term
Why do stores like scan and go options, apps, and one-click purchases?
It’s harder for customers to pay, so they end up saving money
It makes paying easier and faster, so customers are more likely to overspend
Digital pay is the way of the future, and retail stores like being ahead of the times
It’s easier for the retail store clerks
When someone steals and uses your debit or credit card info, that’s called ____.
Networking
Borrowing
Fraud
Authorized spending
What does it mean to develop power over purchase?
You are powerless in the face of an impulse purchase
You can make decisions very quickly when it comes to purchasing items
You are able to slow down and think through your motives before buying something
You have power to purchase whatever you want, and you do so
Americans spend over $2,100 a year on ____.
Impulse purchases
Entertainment
Groceries and eating out
Credit card fees
Before you insert your debit card at the gas pump, you should always…
Check out the card reader to see if it looks different, loose, or worn
Make sure you have enough money in your account
Ask the store clerk if there has been a thief here lately
Pay cash – never use a card at a gas pump
Why does brand recognition help businesses?
It makes their name and logo easily memorable for consumers
It helps the business recognize their own logo
It keeps the consumer from buying more of their product or service
It helps them partner with other businesses
Why should you never buy the extended warranty?
Retail items and products rarely break or malfunction
You should buy the extended warranty. It is a smart financial decision
Most retailers will replace or repair the product if it stops working within the first year
The retailers never keep their promises
Stuff doesn’t equal _____. Debt makes people look better off than they ____.
Wealth; actually are
Investments; should be
Happiness; deserve
Income; want to be
An example of discretionary spending is ____.
Utilities and food
Transportation
Monthly rent
Nonessential goods and services
As an effective marketing strategy, companies pay a lot to…
Have their products strategically placed in the store
Get you to dislike their branding
Confuse you about their product
Choose a brand similar to theirs
Companies use marketing to get your prefrontal cortex offline so you’ll be vulnerable to impulse purchases.
True
False
What is the digital marketing strategy that tracks users across the web?
Retargeting
Native ads
YouTube videos
Content marketing
