Financial Literacy Test

The total one gets to "take home" from a paycheck after taxes and deductions are taken out is known as what?

Net pay

Which of the following is the form employers use to determine how much tax do deduct from a paycheck

w-4

Which of the following is the form an employer provides to an employee to inform them of how much money was deducted from paychecks in a given year?

w-2

Which of the following statements best describes gross pay?

Amount of money one recieves from their job before taxes or other deductions are taken out.

Which of the following will be paid for as part of the escrow funds included in a mortgage loan?

Property tax

When seeking to open a bank account, which of the following is needed?

Government - issued identification

When one is seeking to purchase a product at a store, what additional cost must be paid in addition to the listed price of the product?

Sales tax

Which of the following best describes the concept of APR?

The credit card interset rate, calculated on a yearly basis

A certificate of deposite (CD) differs from a traditional savings account in what way?

CDs must remain untouched for a fixed period of time

All of the following are advantages of bundling Except what?

Increases insurance options

Which of the followig investments is characterized by the following traits: Insured by FDIC or NCUA, Lowest interest rate of all investments, Number of withdrawals per month may be limited?

Traditional savings account

What is the term used to describe interest earned on interest gained?

Compound interest

Which of the following is a financial institution that handles money, including keeping it safe for saving or commercial purposes?

Bank

Using the simple interest formula, calculate the interest earned on $150 after one year at a 6% return rate.

$9.00

When one recieves a product or service now, but pays for it later, it is known as what?

Credit

All the following are examples of installment loans EXCEPT:

credit card

Which of the following purchasing cards remove funds from one's checking account almost instantly after one makes a purchase?

Debit card

When choosing between using a bank or a credit union, which of the following is an advantage that credit unions generally have in compression to banks?

Owned by members, who may vote and elect board of directs

Which of the following types of mortgage loan helps individuals who may have low credit score, little cash available for a down payment, and could be a first-time home buyer?

Government -insured loan

When the federal government raises interest rates, which of the following is generally impacted positively for a consumer?

Savings account

Which of the following types of insurance provides income to people who depended on a wage earner after the wage earner dies?

life insurance

Which of the following types of insurance assistes in covering medical expenses associsted with short - term illness and accidents?

Health insurance

Which of the following types of insurance helps pay for stays in a nursing home?

Long - term care insurance

The purpose of an umbrella insurance policy is best summarized as what?

Protect the holder against liability costs beyond what is covered by other insurance

Which of the following practices does not lead tto a higher car insurance rate?

Participate in a defensive driving course

Which of the following is the term for a person who relies on someone else financially?

Dependent

When planning one's personal budget, a variable expense is what?

An expense that may change in amount from month to month

The rule of 72 is used to calculate what?

The amount of time it will take for an investment to double in value

When one party to a contract does not do what the contract requires, the individual has committed a what of the contract?

breach

Which of the following is the correct sequence in the formation of a contract?

Offer, acceptance, consideration, agreement

Which of the following positions can confirm signatures to a contract?

Notary public

Salles tax amounts are generally established by which of the following?

State and local rates

If the value of one's house increases, all the following will most likely rise except:

Mortgage principal

Federal income tax brackets can be impacted by which of the following?

Marriage status of taxpayer

Which of the following is an advantage of maintaining a good credit score?

Greater chance of recieving a loan with a low interest rate

Which of the following practices could negatively affect one's credit score?

Reaching the spending limit on one's credit score?

The phrase "balancing a checkbook" refers to which practice?

Comparing bank statements to withdrawl records (checks, ATM, ETF) to track spending

If one spends more money than they have in their bank account, they are charged a what?

Overdraft fee

When one is inspecting a banking or credit statement and discover several charges they did not make, the individual is most likely a victim of what?

Identify theft

Which of the following allow a customer to pay a deposite on an item, and then not recieve the item until the balance is paid in full?

layaway plan

Which of the following investments is characterized by the following traits: Investor loans money a city county govt or company, money is repaid after a cetain date, plus interest is paid, Generally considered a safe investment, although not insured by the FDIC?

Bonds

Rent-to-own agreements can negativeely imact consumers because:

Consumers will pay a high interest rate on the item\

Which of the following financial institutions may an individual visit to get money from a check if they do not have a traditional bank account?

Check cashing service

Which of the following financial institutions recieves criticism for targeting people in poverty and other vulnerable populations through charging extremely high interest rates?

Payday lenders

Banks offer the service of a saftey deposite box, which can be used for what?

Protect personal documents from potential loss

When eating at a restaurant, one must consider which of the following additional costs to the price pf their meal anf sales tax?

Tip

When one invests in a commodity, they are investing in a what?

Natural resource

When recieving a mortgage loan, if an individual cannot make a large down payment, they will most likely have to pay for what?

private mortgage insurance

Which of the following is the typical amount of time in which a borrower must pay off a mortgage loan?

Thirty(30) years

Whicg of the following investments is characterized by the following traits: Risky, Ownership in a corporation, Pays dividens, potential for rewards is high.

Stocks