Financial Calculations and Consumer Expenses Quiz

Test your knowledge with 14 questions on compound interest, budgeting, investments, credit scores, and more.

Practice Learn Test

What is the purpose of a budget?

To track income only

To control spending only

To allocate income and control spending

To invest money

Which of the following is an example of a variable expense?

Rent

Utilities

Groceries

Internet subscription

What does APR stand for in the context of loans and credit cards?

Annual Percentage Rate

Average Personal Revenue

Adjusted Payment Ratio

Annual Payment Return

What is the purpose of an emergency fund?

To fund luxurious vacations

To cover unexpected expenses or loss of income

To invest in high-risk assets

To pay off debt

What does the term 'liquidity' refer to in finance?

The ability to convert an asset into cash quickly without significant loss of value

The profitability of an investment

The growth rate of a company's revenue

The amount of debt a company holds

What is the purpose of diversification in investment?

To concentrate investment in one asset for higher returns

To spread investment across different assets to reduce risk

To invest only in high-risk assets for maximum profit

To avoid investing altogether

What is the formula to calculate compound interest?

Principal * Rate * Time

Principal * (1 + Rate)^Time

Principal * Rate / Time

Principal * (1 - Rate)^Time

Which of the following is NOT a component of the Debt-to-Income Ratio (DTI)?

Monthly income

Total monthly debt payments

Credit score

Monthly housing expenses

Which of the following is a characteristic of a fixed-rate mortgage?

Interest rate fluctuates with the market

Monthly payments change over time

Interest rate remains constant throughout the loan term

Requires a balloon payment at the end of the term

#10

Which of the following is NOT a factor that affects credit score?

Payment history

Credit utilization

Age and gender

Types of credit used

#11

What is the purpose of a 401(k) retirement account?

To provide health insurance benefits

To save for college tuition

To save for retirement with tax advantages

To invest in real estate

#12

Which of the following is NOT a type of investment account?

IRA (Individual Retirement Account)

CD (Certificate of Deposit)

Roth (Retirement Only Taxable at Home)

401(k) (Employer-Sponsored Retirement Account)

#13

What is the formula to calculate Return on Investment (ROI)?

(Net Profit / Initial Investment) * 100%

(Net Profit - Initial Investment) / Initial Investment

(Net Profit + Initial Investment) / Initial Investment

(Net Profit / Initial Investment)

#14

What is the formula to calculate the present value of an investment?

Future Value / (1 + Rate)^Time

Future Value * (1 + Rate)^Time

Future Value * (1 - Rate)^Time

Future Value * Rate * Time