Which will maximize the amount of interest earned on your money?
answer
High interest rate and long period of time
question
Compounding frequency refers to
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how often your interest is calculated and added back into your account. The more frequently this happens, the more interest you will earn.
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Rule of 72
answer
an estimate used to find out how long it will take your money to double. All you need to know is your interest rate!
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The primary goal of the Federal Reserve system is to:
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maintain a safe and stable banking system.
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Which of the following statements about FDIC-insured accounts is correct?
answer
FDIC-insured accounts are protected up to $250,000 per person per bank.
question
If you need to set up direct deposit, which information from your check would you likely need?
answer
The routing number indicates which financial institution issued the check, and is used to set up direct deposit.
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Which of the following payment types require you to pay upfront?
answer
Only money orders and pre-paid cards require upfront payment. Credit cards and merchant cards are forms of credit.
question
Which of the following statements are TRUE about credit cards? I. When you use a credit card, the money comes directly out of your account. II. Credit cards typically offer more fraud protection than debit cards. III. Transactions made with a credit card can impact your credit score.
answer
Credit card transactions can impact your credit score. Credit cards also typically offer more fraud protection than debit cards.
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All of the following are fees typically charged by credit card companies EXCEPT:
answer
reload fees. Although these fees are not charged for all cards, annual fees, balance transfer fees and late payment fees are all common credit card fees.
question
Which of the following statements about minimum payments is INCORRECT?
answer
You will not be charged a late fee if you make the minimum payment on your credit card balance.
question
Which of the following statements are TRUE about credit scores?
answer
Credit scores indicate the likelihood an individual will repay his/her debt. We have an idea of how the scores are calculated, but only the credit bureaus know the exact calculation.
question
What financial behaviors will typically lead to a low credit score?
answer
Maxing out your credit cards will typically lower your credit score.
question
Which of the following factors will have the greatest impact on your credit score? I. Length of Credit History II. Payment History III. Amounts Owed IV. Types of Credit Used
answer
Your payment history and your amount of debt has the largest impact on your credit score.
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Which is LEAST important to maintaining a healthy credit score?
answer
It's most important that you regularly check your reports, dispute inaccurate information, and consistently make your payments on time. Knowing your exact credit score can be useful, but not the most important information.
question
When looking to finance higher education, what is the best order to look for funding sources?
answer
When paying for higher education, always try to find free money sources - like grants & scholarships - first. Then look into federal student loans, since these offer low and fixed interest rates.
question
Which of the following statements about the FAFSA process are TRUE?
answer
The only way to apply for the federal work-study program is by completing the FAFSA form.
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Which of the following correctly pairs a financing option with its description?
answer
529 Savings Plans are a great way to save for higher education, and offer various tax benefits.
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Which of the following statements is correct?
answer
New cars typically lose the most value in the first year after they are purchased.
question
A typical housing lease may require a tenant to:
answer
repair damages and purchase renters insurance
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Which of the following will affect the size of your monthly mortgage payment?
answer
size of down payment, length of mortgage and purchase price
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Which of the following insurance types will cover the possessions inside your home?
answer
Both renter's and homeowner's insurance will cover possession inside your home. Only homeowner's insurance will cover your home itself.
question
Which of the following best describes how auto insurance companies manage risk?
answer
Auto insurance companies manage the increased cost associated with high-risk drivers by both charging them higher rates and balancing them out with low-risk drivers.
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Which of the following retirement plans offer tax benefits?
answer
IRA 401k 401b
question
What is a possible reason a company would sell stock?
answer
a company often issues stock to raise money so it can grow and expand.
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Investors nearing retirement will typically shift their investment portfolios to include ________ risk investments.
answer
lower
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rule of 72
answer
divide 72 by the interest rate
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spend more money then make
answer
debt and bad credit score
question
simple vs compound interest
answer
s- principle x interest rate x time compound only once a year
c- principle( 1+i)^n
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compounding
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the more times you compound the more earn in interest
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what accounts are best for saving
answer
CDs and money market pay higher interest yet need more as minimum balance
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APR
answer
interest you pay when you use a credit card
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subsidized federal loan
answer
This is a type of federal student loan on which the government pays the interest that accrues while a student is in school
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unsub
answer
This is a type of federal student loan on which the government does not pay the interest that accrues while a student is in school.
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