Deck 2: Tools for Your Financial Journey

Question 1

The Federal Deposit Insurance Corporation and the National Credit Union Administration protect savings deposits up to what amount?

A) $250,000.
B) $350,000.
C) $450,000.
D) $500,000.

Answer 1

$250,000.

Question 2

What is the APR if a bank pays 0.25% interest monthly on savings?

A) 2.4%.
B) 3.0%
C) 3.6%.
D) 4.8%.

Answer 2

3.0%

Question 3

What formulas and calculations are some of the most valuable external finance tools that allow you to consider financial goals in terms of money, time, and interest?

A) APR.
B) APY.
C) Rule of 72.
D) Time value of money (TVM).

Answer 3

Time value of money (TVM).

Question 4

Which of the following refers to a series of equal payments or deposits?

A) Annuity.
B) Future value.
C) Number of periods.
D) TVM.

Question 5

What should you compare when comparing savings options?

A) Principal.
B) Interest rate.
C) APR.
D) APY.

Question 6

Which of the following refers to the price paid for using money?

A) Interest.
B) Debt.
C) Principal.
D) Compound growth.

Question 7

How long will it take for your money to double if the annual percentage yield (APY) is 6%?

A) 12 years.
B) 12 months.
C) 10 years.
D) 10 months.

Question 8

Which of the following can affect the loan interest rate?

A) Your salary.
B) Purpose of the loan.
C) Your prior financial behaviors.
D) All of these answer choices are correct.

Question 9

What is the annual percentage rate (APR) if a bank pays 0.3% interest monthly on savings?

A) 1.8%.
B) 2.4%.
C) 3.6%.
D) 4.8%.

Question 10

What is the APR if a bank pays 0.4% interest monthly on savings?

A) 1.8%.
B) 2.4%.
C) 3.6%.
D) 4.8%.

Question 11

Which of the following refers to the amount of money borrowed?

A) Interest.
B) Debt.
C) Principal.
D) Compound growth.

Question 12

How long will it take for your money to double if the APY is 8%?

A) 9 years.
B) 9 months.
C) 12 years.
D) 12 months.

Question 13

What should you compare when comparing loans?

A) Principal.
B) Interest rate.
C) APR.
D) APY.

Question 14

If risk is low, then the interest rate that your money earns is generally

A) high.
B) low.
C) doubled.
D) not affected.

Question 15

Which of the following provides an estimate of how long it will take you to double your money?

A) Rule of 72.
B) Compounding interest.
C) APR.
D) APY.

Question 16

Which of the following estimates how much current savings and investments will be worth at a certain date in the future?

A) FV of a lump sum.
B) PV of a lump sum.
C) FV of an annuity.
D) PV of an annuity.

Question 17

Which of the following determines the current value of a future amount?

A) FV of a lump sum.
B) PV of a lump sum.
C) FV of an annuity.
D) PV of an annuity.

Question 18

Which of the following is a rule that can help you grow your money?

A) The longer you let your money grow, the more you will have in the future (assuming the same interest rate).
B) The more interest you earn, the more you will accumulate over time.
C) The higher the interest rate you want, the more risk you must take.
D) All of these answer choices are correct.

Question 19

Which of the following refers to investment gains earned in the first time period that are put to work in the second time period to earn additional investment returns?

A) Interest.
B) Debt.
C) Principal.
D) Compound growth.

Question 20

Which of the following refers to the rate of return or discount rate used to determine future value (FV) or present value (PV)?

A) Principal.
B) Interest.
C) Rule of 72.
D) TVM.

Question 21

If you start with $2,000 today, approximately how much will you have in 2 years if you can earn 6% each year?

A) $2,247.
B) $2,547.
C) $3,047.
D) $3,247.

Question 22

Approximately how much money do you need today to ensure that you will have $12,000 in 3 years, assuming you can earn 4% on your savings?

A) $10,668.
B) $11,224.
C) $11,668.
D) $12,668.

Question 23

Which of the following estimates how much you will have in the future if you save or invest a set dollar amount on a regular basis?

A) FV of a lump sum.
B) PV of a lump sum.
C) FV of an annuity.
D) PV of an annuity.

Question 24

Approximately, what interest rate would you need to earn in order to turn $6,500 into $13,000 over 8 years?

A) 9%.
B) 10%.
C) 11%.
D) 12%.

Question 25

Jorge has the opportunity to receive $12,000 now or $15,000 in 4 years. If Jorge can earn 6% on his investment, what is the approximate present value of the $15,000?

A) $15,000.
B) $13,785.
C) $11,881.
D) $12,000.

Question 26

If Sean can earn 4%, approximately what will his $3,000 in savings be worth in 10 years?

A) $3,600.
B) $4,441.
C) $5,640.
D) $6,240.

Question 27

If Mia can earn 6%, approximately what will her $5,000 in savings be worth in 15 years?

A) $8,983.
B) $9,983.
C) $10,983.
D) $11,983.

Question 28

If you start with $2,500 today, approximately how much will you have in 5 years if you can earn 4% each year?

A) $2,241.
B) $2,541.
C) $3,041.
D) $3,241.

Question 29

Approximately, what interest rate would you need to earn in order to turn $2,500 into $5,000 over 6 years?

A) 12%.
B) 14%.
C) 16%.
D) 18%.

Question 30

How much money do you need today to ensure that you will have $16,000 in 4 years, assuming you can earn 6% on your savings?

A) $10,674.
B) $11,274.
C) $11,674.
D) $12,674.

Question 31

Approximately, how many years would it take your money to grow from $4,000 to $8,000 if you could earn 4% interest?

A) 12.
B) 14.
C) 16.
D) 18.

Question 32

Which of the following determines the current value of a regular series of equal payments occurring in the future?

A) FV of a lump sum.
B) PV of a lump sum.
C) FV of an annuity.
D) PV of an annuity.

Question 33

Jorge has the opportunity to receive $10,000 now or $12,000 in 4 years. If Jorge can earn 6% on his investment, what is the approximate present value of the $12,000?

A) $10,000.
B) $9,505.
C) $11,881.
D) $12,000.

Question 34

Approximately, how many years would it take your money to grow from $5,000 to $10,000 if you could earn 6% interest?

A) 12.
B) 14.
C) 16.
D) 18.

Question 35

Approximately how much money will you accumulate in your retirement account if you save $2,500 per year for 40 years and earn 5% on your investments?

A) $201,668.
B) $254.889.
C) $289,464.
D) $301,999.

Question 36

Emanuel invested $10,000 in a security that will double in value in 10 years. Approximately, what annual rate of return is this investment making?

A) 10%.
B) 7.2%.
C) 6.3%.
D) 6%.

Question 37

A grandmother just put $12,000 into an investment earning 6% a year for her granddaughter's college education. Approximately, how much will be in the account in 10 years assuming that all the interest is left in the account?

A) $19,200.
B) $21,490.
C) $16,250.
D) $21,339.

Question 38

Approximately how much money will you accumulate in your retirement account if you save $5,000 per year for 15 years and earn 6% on your investments?

A) $101,668.
B) $111,224.
C) $116,380.
D) $121,668.

Question 39

If you start with $4,000 today, approximately how much will you have in 8 years if you can earn 8% each year?

A) $6,454.
B) $7,404.
C) $8,444.
D) $9,244.

Question 40

Approximately what interest rate would you need to earn in order to turn $3,500 into $7,000 over 5 years?

A) 12%.
B) 15%.
C) 16%.
D) 18%.

Question 41

Which of the following refers to an asset that increases in fair market value over time?

A) Depreciating asset.
B) Liquidity.
C) Liability.
D) Appreciating asset.

Question 42

Which of the following can you use to solve TVM problems?

A) Microsoft Excel.
B) A financial calculator.
C) An app designed to solve these types of problems.
D) All of these answer choices are correct.

Question 43

Which of the following refers to an asset that decreases in value over time?

A) Depreciating asset.
B) Liquidity.
C) Liability.
D) Appreciating asset.

Question 44

Which of the following refers to a payment of the same amount for a set number of months or years, such as in a car loan or mortgage?

A) Amortized payment.
B) Compound interest.
C) Annuity.
D) Interest.

Question 45

Which of the following is an asset that would depreciate in value over time?

A) Car.
B) Computer.
C) Bicycle.
D) All of these answer choices are correct.

Question 46

Which of the following refers to how quickly an asset can be converted to cash?

A) Liability.
B) Liquidity.
C) Fair market value.
D) Monetary asset.

Question 47

Which of the following is on the left side of the balance sheet?

A) Assets.
B) Liabilities.
C) Net worth.
D) Principal.

Question 48

Which of the following refers to saving money on a regular basis?

A) Amortized payment.
B) Compound interest.
C) Annuity.
D) Interest.

Question 49

What happens to your net worth if you sell your car for more than you owe?

A) Increase.
B) Decrease.
C) No change.
D) Cannot determine with the given information.

Question 50

Which of the following is on the right side of the balance sheet?

A) Assets.
B) Liabilities only.
C) Net worth only.
D) Liabilities and net worth.

Question 51

Which of the following refers to your assets minus your liabilities?

A) Assets.
B) Liabilities.
C) Net worth.
D) Principal.

Question 52

Approximately how much money will you accumulate in your retirement account if you save $1,000 per year for 30 years and earn 6% on your investments?

A) $72,468.
B) $79,058.
C) $86,380.
D) $91,668.

Question 53

Which of the following is an asset that would appreciate in value over time?

A) Car.
B) Computer.
C) House.
D) Bicycle.

Question 54

Which of the following refers to the difference between the value of an asset and any liability (debt) associated with that asset?

A) Equity.
B) Liquidity.
C) Appreciating asset.
D) Depreciating asset.

Question 55

Which of the following refers to what you owe?

A) Assets.
B) Liabilities.
C) Net worth.
D) Principal.

Question 56

Which of the following refers to what you own?

A) Assets.
B) Liabilities.
C) Net worth.
D) Principal.

Question 57

Which of the following refers to a debt that is paid off within a year?

A) Short-term debt.
B) Long-term debt.
C) Liabilities.
D) Assets.

Question 58

Which of the following refers to borrowing money to buy something that either depreciates quickly in value or is consumed immediately?

A) Good debt.
B) Bad debt.
C) Asset.
D) Liability.

Question 59

Max has the opportunity to receive $15,000 now or $20,000 in 5 years. If Max can earn 6% on his investment, what is the approximate present value of the $20,000?

A) $15,000.
B) $20,000.
C) $11,881.
D) $14,945.

Question 60

Which of the following is an example of a short-term debt?

A) Utility bill.
B) Car loan.
C) Student loan.
D) Mortgage.

Question 61

When setting your goals, which factors should you consider in order to make a meaningful decision?

A) Your personal attitudes.
B) Your personal perceptions.
C) Your personal preferences.
D) All of these answer choices are correct.

Question 62

Which of the following is an element in a budget?

A) Income.
B) Fixed expenses.
C) Variable expenses.
D) All of these answer choices are correct.

Question 63

Which of the following is the first step in creating a financial plan?

A) What is your starting point?
B) What is your financial score?
C) What is your goal?
D) What is your financial capacity?

Question 64

Which ratio indicates what percentage of your income that you are using to pay all of your debts?

A) Consumer debt-to-income ratio.
B) Total debt-to-income ratio.
C) Savings ratio.
D) Emergency fund ratio.

Question 65

In managing your household financial resources, what should you know in order to determine how much you're really earning and spending?

A) Where your money for day-to-day expenses is coming from and where it is going.
B) Where your longer-term goal implementation is coming from and where it is going.
C) Your cash flows, by systematically tracking your income and expenses.
D) All of these answer choices are correct.

Question 66

Which of the following is an element of a financial plan?

A) Financial knowledge.
B) Financial experience.
C) Risk tolerance.
D) All of these answer choices are correct.

Question 67

Which ratio indicates the percentage of money that you are setting aside on a regular basis?

A) Consumer debt-to-income ratio.
B) Total debt-to-income ratio.
C) Savings ratio.
D) Emergency fund ratio.

Question 68

Which of the following will provide you with a realistic understanding of your current risk tolerance, financial knowledge, and feelings of control?

A) Credit score.
B) Net worth.
C) Surplus.
D) Financial score.

Question 69

Which of the following refers to how much you think you will receive or spend in each category?

A) Fair market value.
B) Projection.
C) Liquidity.
D) Budget.

Question 70

Which of the following means that your expenses exceed your income?

A) Surplus.
B) Deficit.
C) Net worth.
D) Asset.

Question 71

Which of the following is the first step of resource management?

A) Track where your resources come from.
B) Track where your resources are being used.
C) Set and know your financial goals.
D) Develop your own guidelines regarding the use of your resources.

Question 72

Which of the following can be used for tracking?

A) Computer spreadsheet.
B) Pen and paper.
C) Smartphone app.
D) All of these answer choices are correct.

Question 73

Which of the following includes all resources that can be saved or spent?

A) Expense.
B) Income.
C) Variable asset.
D) Liability.

Question 74

After tracking where your resources come from and how they are used, what tool can be used to help you manage your financial resources?

A) A budget.
B) A cash flow statement.
C) An income & expense statement.
D) All of these answer choices are correct.

Question 75

Which of the following means that you have planned well and have your money working for you?

A) Surplus.
B) Deficit.
C) Net worth.
D) Asset.

Question 76

Which ratio indicates whether you have sufficient resources in case of an emergency?

A) Consumer debt-to-income ratio.
B) Total debt-to-income ratio.
C) Savings ratio.
D) Emergency fund ratio.

Question 77

Which of the following refers to the ability to keep moving forward toward goal achievement even if you face a few financial challenges or emergencies along the way?

A) Financial literacy.
B) Financial capacity.
C) Financial score.
D) Financial ability.

Question 78

Which of the following is the third step in creating a financial plan?

A) What is your starting point?
B) What is your financial score?
C) What is your goal?
D) What is your financial capacity?

Question 79

Which of the following does a budget include?

A) Assets.
B) Income only.
C) Expenses only.
D) Income and expenses.

Question 80

Which of the following refers to a financial tool that helps you regulate how quickly, and in what ways, your money is being used so that you can stay focused on accomplishing your goals?

A) Budget.
B) Balance sheet.
C) Spreadsheet.
D) Net worth.