#1
1. If you invest $1,000 at an annual interest rate of 5%, how much will you have after one year?
#2
6. What is the purpose of a credit score?
To determine income levels
To assess investment risk
To measure creditworthiness
To calculate tax liabilities
#3
11. What does the term '401(k)' refer to in personal finance?
A type of savings account for emergencies
A retirement savings plan offered by employers
A high-yield investment option
A short-term investment plan
#4
16. What is the concept of 'Emergency Fund' in personal finance?
A fund dedicated to luxury expenses
A fund set aside for unexpected financial emergencies
A fund for long-term investments
A fund for short-term vacations
#5
21. What is the concept of 'Net Worth' in personal finance?
Total assets minus liabilities
Total income minus expenses
Total savings minus investments
Total debt minus credit
#6
2. What is the formula for calculating compound interest?
P = A / (1 + rt)
A = P(1 + rt)
P = A(1 + r)^t
A = P / (1 + rt)
#7
3. If you have a credit card with a 15% annual interest rate and a $500 balance, how much interest will you owe after one year?
#8
7. If you have a mortgage with an interest rate of 4% and a loan amount of $200,000, what is your monthly payment for a 30-year term?
$955.58
$1,022.50
$1,166.67
$1,325.00
#9
8. What is the difference between simple interest and compound interest?
Simple interest is calculated only on the principal amount, while compound interest includes interest on interest.
Simple interest includes interest on interest, while compound interest is calculated only on the principal amount.
Simple interest and compound interest are the same.
Simple interest is used for long-term loans, while compound interest is used for short-term loans.
#10
12. How is the Annual Percentage Rate (APR) different from the nominal interest rate?
APR includes additional fees, while the nominal interest rate does not.
Nominal interest rate includes additional fees, while APR does not.
APR and nominal interest rate are the same.
Neither APR nor nominal interest rate includes additional fees.
#11
4. What is the future value of an investment of $2,000 at an annual interest rate of 8% for five years?
#12
5. If a person's monthly income is $4,000 and they spend 25% on rent, how much do they spend on rent each month?
#13
9. How is the Debt-to-Income Ratio (DTI) calculated?
Total Debt / Total Income
Total Debt - Total Income
Total Income / Total Debt
Total Income - Total Debt
#14
10. What is the concept of 'opportunity cost' in personal finance?
The cost of taking advantage of opportunities in the market
The cost of forgoing the next best alternative when making a decision
The cost of investment opportunities
The cost of missed financial opportunities
#15
14. What is the Rule of 72 used for in finance?
To calculate mortgage payments
To estimate how long it takes for an investment to double at a fixed annual rate
To determine credit card interest
To calculate inflation rates