personal finance literacy test module 3

To what interest rate can credit cards possibly reach? 50% 20% 85% 90%

20%

Which of the following is a good estimate of the interest that you might pay using a credit card? Credit card companies do not charge interest. 20% 200% 2%

20%

How much of an impact can a credit utilization rate have on your credit score? 30% 90% 80% 3%

30%

Which of the following is NOT a taxed account and is actually tax-deferred? 401(k) plan Money market account Savings account Certificate of deposit (CD)

401 k

Which of the following are deductions that an employee can voluntarily request to have deducted? Choose all five answers that apply. Please do not guess, as incorrect answers are penalized for this question type. 401K and other retirement/investment plans Life insurance Union or organizational dues Stock plan Federal income tax Health insurance

401K and other retirement/investment plans Life insurance Union or organizational dues Stock plan Health insurance

What age must a person be to receive Medicare benefits provided by the Medicare tax? 49 65 21 70

65

Which of the following, which most of us will have, allows for a community in and of itself? A career A cell phone A pet A daily exercise class

A career

What is a lease? An agreement between an owner and a tenant that outlines the obligations of both parties regarding renting an apartment or house An insurance policy A list of all the amenities provided by the owner for the tenant A list of suggestions for renting an apartment or house

An agreement between an owner and a tenant that outlines the obligations of both parties regarding renting an apartment or house

Getting into debt can deny God what? An opportunity to live in poverty An opportunity to grow our debt An opportunity to take all of our possessions An opportunity to provide for needs that He has the supernatural ability to provide or an opportunity to work in our lives as we learn to trust Him along the way

An opportunity to provide for needs that He has the supernatural ability to provide or an opportunity to work in our lives as we learn to trust Him along the way

Getting into debt can deny God what? An opportunity to provide for needs that He has the supernatural ability to provide or an opportunity to work in our lives as we learn to trust Him along the way An opportunity to grow our debt An opportunity to take all of our possessions An opportunity to live in poverty

An opportunity to provide for needs that He has the supernatural ability to provide or an opportunity to work in our lives as we learn to trust Him along the way

Mr. Ron Blue, along with other biblically-based financial professionals out there, feels which way about buying vs. leasing a car? Both are equally financially sound. Leasing is a more financially-sound decision than buying. Leasing is the only option you should ever consider. Buying is a more financially-sound decision than leasing.

Buying is a more financially-sound decision than leasing.

What kind of credit is the most favorable to have on your credit report? Credit cards and department store accounts Payday loans Car title loans Credit backed by assets or equity, such as a house mortgage or car loan

Credit backed by assets or equity, such as a house mortgage or car loan

When choosing an organization to volunteer for, which of the following would be a good idea to do first? None of these Do some research on charities or volunteer groups that match your skills and interests Show up at an organization unannounced and demand to be given a volunteer position Randomly choose an organization from Google

Do some research on charities or volunteer groups that match your skills and interests

Which is true regarding return policies of car dealerships? You and the salesperson determine the details of the return and agree to write nothing down. All are the same and are mandated by the government. Car dealerships do not have return policies. Each may be different, and you should get the policy in writing and read it carefully.

Each may be different, and you should get the policy in writing and read it carefully.

The police are NOT responsible for which of the following? Ensuring teenagers wake up for school Patrolling areas to help keep them safe Arresting those either caught in the act or suspected of committing a crime Leading investigations in offenses of law, varying from personal injury and murder to robbery and destruction of property

Ensuring teenagers wake up for school

What federal department is responsible for enforcing laws related to consumer credit? Federal Trade Commission Securities and Exchange Commission Fair Isaac Corporation Federal Bureau of Investigation

Federal Trade Commission

Which of the following is NOT a good way to research an organization? Search for the organization on Google to see what comes up Go to the organization's location after dark and peer into the windows Check to see if the organization has been in the news Look for both positive and negative information

Go to the organization's location after dark and peer into the windows

Debt may be required at some point in your life, but who/what is our ultimate provider? Our spouse God Our job Our parents

God

We are stewards of our money, but who owns it all? Our bank God We do Large corporations

God

If you have any question about the best way to file your taxes, which would be the best option? Hire a tax professional, such as an accountant Ask a high school-aged friend for advice Call the IRS and demand to speak to the Commissioner of the Revenue Make an estimate and file your taxes

Hire a tax professional, such as an accountant

Which of the following is NOT a typical municipal service within a community that is funded by taxes? House painting Garbage pick-up Water treatment facilities Street maintenance

House painting

When buying or leasing a vehichle, it is important to consider which of the following? How fast it will go The color If it fits your budget The way your friends will see you in it

If it fits your budget

if possible, you should choose to pay for a car in which way? With a credit card to avoid financing with a bank With a second mortgage you take out on your home With financing through the dealer to ensure you pay the highest interest possible In cash so you avoid interest and going into debt

In cash so you avoid interest and going into debt

Credit cards usually have specific terms that you agree to when accepting the credit card service. This could include all of these EXCEPT: An annual fee is assessed yearly for the privilege of using the credit card. Late fees are charged when your payment is received past the date due. The minimum payment is based on a percentage of the balance on the account. Interest rates are determined by your local government.

Interest rates are determined by your local government.

Paying taxes is a biblical principle. In what book of the Bible does Jesus tell us to render to Caesar what is Caesar's? Acts Proverbs Jesus did not say this in any book of the Bible. Matthew

Matthew

_____ pay is the amount of monetary compensation that an employee receives after all statutory deductions (government-mandated/controlled) and other personal deductions are withheld and distributed to the designated recipients.

Net

Which of the following are included in gross pay? Choose the two correct answers. Please do not guess, as incorrect answers are penalized for this question type. Overtime pay Tax refunds Regular pay

Overtime pay Regular pay

The costs for public education are mainly for what? The cost of the buildings themselves Payroll expenses related to public school employees Materials for classrooms Online resources used by teachers

Payroll expenses related to public school employees

Which of the following is NOT a step that credit raters go through to assign a credit score? Collecting information from the three major credit reporting bureaus — Experian, TransUnion, and Equifax Comparing your credit history to the credit history of consumers with similar profiles Adding or subtracting points from your score for each item that makes you more or less likely to repay a debt Reviewing your personal social media pages

Reviewing your personal social media pages

What are some types of taxes that you may pay in your lifetime? Choose all five answers that are correct. Please do not guess, as incorrect answers are penalized for this question type. Sales taxes Biblical taxes Social Security taxes Friendship taxes Income taxes Homework taxes Medicare taxes Property taxes

Sales taxes Social Security taxes Income taxes Medicare taxes Property taxes

All of the following people should receive W-2 forms EXCEPT: Edgar, who averages 10 hours per week as one of five employees at We Clean Pools Marcus, who is on salary as a sales representative at a shoe store, working full time Serena, who is a freelance wedding photographer Melinda, who works 40 hours a week at a local ice cream shop during the summer

Serena, who is a freelance wedding photographer

Which of the following is true about deductions taken out of a person's paycheck? Some are used to pay for government services, Social Security, and other societal needs. They are all elective. They are always fun to pay. They are the same amount for each worker.

Some are used to pay for government services, Social Security, and other societal needs.

Which of the following is possible when you enter into debt? You will have more money. You will not owe anyone anything. Stress can be added to your finances, your relationships, and the overall peace of your household. You will not have any money to repay at a later time.

Stress can be added to your finances, your relationships, and the overall peace of your household.

Which of the following are loans offered to college students and their parents? Dorm loans Student loans Party loans Graduate loans

Student loans

Which organizations use 403(b) plans? The largest corporations in the country Tax-exempt or non-profit organizations, such as public schools, colleges, hospitals, libraries, philanthropic organizations, and churches Organizations that cater to volunteers Organizations that have more than 100 employees

Tax-exempt or non-profit organizations, such as public schools, colleges, hospitals, libraries, philanthropic organizations, and churches

Which part of the pie is arguably the most important to study because it can be the hardest for people? The "Grow" section The "Live" section The "Owe" section The "Give" section

The "Owe" section

What is an adjusted gross income (AGI)? You salary after your Christmas bonus is added in The amount you choose to pay in taxes The amount of your income you will pay taxes on Your salary plus your spouse's salary

The amount of your income you will pay taxes on

When you receive a credit card, who has set the credit limit? The credit card company The government Your parents You get to set your own limit.

The credit card company

Each time someone requests your score, the credit rater compares your credit history to whom? The credit history of consumers with similar profiles Your parent's credit history The credit history of the 100 wealthiest Americans Your pastor's credit history

The credit history of consumers with similar profiles

Which is true regarding researching the dealer's price for the car and options? You must make your best guess as to what the dealer's price was. You must write to your state representatives to obtain this information. The dealer invoice price is available on a number of websites and in printed pricing guides. However, it is illegal to see this information without permission from the dealership. The dealer invoice price is available on a number of websites and in printed pricing guides, so you should know this information, as it is available to anyone.

The dealer invoice price is available on a number of websites and in printed pricing guides, so you should know this information, as it is available to anyone.

What is an annual percentage rate (APR)? The interest rate that credit cards charge and is matched to your age The break in interest payments that credit cards give around Christmas The interest rate that credit card companies and other loan companies charge in interest on unpaid balances The interest that you choose to pay each year

The interest rate that credit card companies and other loan companies charge in interest on unpaid balances

Which is NOT true about a single-owner landlord of a rental property? They may own an adjacent property, live in the same town, or live in another city. They are responsible for meeting all the expectations of a landlord as outlined in the state code or regulations that set up guidelines for landlords and renters. They must give you a better price than a management company. They must provide a safe and habitable rental space.

They must give you a better price than a management company.

You are purchasing a home with a 30-year loan period, and the home's value will increase enough to cover the down payment and to return some money or see it grow. How would you characterize this debt decision? This decision is unwise because homes never increase in value. This is a terrible debt decision because 30 years is too long to mortgage a house. None of these This is a wise debt decision because home values typically increase.

This is a wise debt decision because home values typically increase.

____________________________ are tax-deferred retirement savings and investment plans that offer federal employees the same type of savings and tax benefits that many private corporations offer their employees under 401(k) plans. Thrift savings plans 529 plans 401(k) plans Roth IRAs

Thrift savings plans

In his video, what does Mr. Ron Blue point out as the most important thing to remember about credit cards? To never use it To allow your friends to borrow it To charge as much as possible the first month To plan to pay off the balance each and every month

To plan to pay off the balance each and every month

Which form tells employers how much income tax to withhold from their employees' pay? A sticky note W-4 W-2 WD-40

W-4

When we take on debt, what have we determined about our future? We have determined that we will always be in debt in the future. We have determined that we will make more money in the future. We have determined that the future is still a mystery, and we have no idea what will happen concerning our money. We have determined how our future will go because we know we will owe money.

We have determined how our future will go because we know we will owe money.

Which of the following is NOT a "gut-check" question when determining if debt is a good idea? Why am I doing what I'm doing? Will I look good with this new purchase? Do I have peace in my heart about my purchase/use of debt? Does what I am doing violate any ethical and spiritual principles?

Will I look good with this new purchase?

Do credit cards provide a grace period with no interest? No - interest is charged regardless of when the credit card is paid off. Yes - this period is generally one year. No - interest doubles each day it is not paid. Yes - this period is generally 25 to 30 days.

Yes - this period is generally 25 to 30 days.

Which asset is a mortgage used to purchase? A house A college education A new business A car

a house

Taxes provide revenue for which of the following governments? State All of these Local Federal

all of these

As part of maintaining the safety of the community, most law enforcement departments include employees who deal with ________ control, which includes invasive wild animals and stray pets. animal zoo forest automobile

animal

the ____ is a yearly fee that some credit card companies charge simply for the privilege of having a credit card account with them.

annual fee

____ low-value extras, such as credit insurance, extended warranties, auto club memberships, rustproofing, and upholstery finishes.

avoid

Proverbs 22:7 says the ___ is a slave to the ___

borrower lender

A department store-sponsored card offers special incentives to shop with the store, but it also carries higher interest rates. These cards _______________________. cannot be used anywhere you want since they are sponsored by a specific store never charge late fees never have credit limits never charge interest

cannot be used anywhere you want since they are sponsored by a specific store

Although using credit is better in some cases, paying daily expenses with ______ is usually a better idea when you are sticking to a budget.

cash or check

____ means that the cars have had a more thorough inspection and come with a limited warranty. Prices for these types of cars are usually higher.

certified

a ___ community is not only biblical but is also a great way to meet fellow believers and form meaningful connections.

church

A ____________ is defined as a group of people living in the same place or having a particular characteristic in common.

community

Too many applications for or openings of new accounts may make credit companies wary and affect your ___ score

credit

Too many applications for or openings of new accounts may make credit companies wary and affect your ____ score

credit

a tax ___ is a dollar-to-dollar reduction in your actual tax bill.

credit

There are two basic kinds of credit cards. The typical credit card is based on a/an _____ that is set by ____ , and it is linked to your ____ or personal request. The second kind of credit card is a ____ , and it is more like a ____ because it is directly tied to a checking or savings account. All limits for this card are based on your ____ instead of an approved limit.

credit limit the sponsoring financial institution credit rating secured card debit card

If you have borrowed money, you owe a ____ to a lender

debt

a tax _____ is a dollar amount that the IRS allows you to subtract from your adjusted gross income, making your taxable income lower.

deduction

Getting into debt can ________ God an opportunity to provide for our needs. give provide allow deny

deny

When you rent a home, usually the landlord will ask for a ____ of some kind to hold until you move out to protect him or her in the event that repairs need to be made after your time as a renter.

deposit

Match each service that is paid with taxes to its description. disaster relief fire rescue education Services are provided by both paid and volunteer workers, as well as part-time or full-time workers Provided to all people since the early founding of our country Coordinates staff when an earthquake, wildfire, flood, etc., occurs

disaster relief -> Coordinates staff when an earthquake, wildfire, flood, etc., occurs fire and rescue -> Services are provided by both paid and volunteer workers, as well as part-time or full-time workers education -> Provided to all people since the early founding of our country

Which of the following are payments made by a company to the owners of a company's stock or bond? Savings account payments Dividends Interest payments Certificates of Deposit (CD)

dividends

The _____________ promotes the accuracy, fairness, and privacy of information in the files of consumer reporting agencies. Electronic Fund Transfer Act Fair Credit Reporting Act Fair Credit Billing Act Equal Credit Opportunity Act

fair credit reporting act

It is important to learn about an organization's ____ information, such as if they are spending their money the right way or have a rainy-day fund.

financial

Taxes fund programs and services that benefit individual citizens, including all of the following except: Health Golf lessons Social Services Welfare

golf lessons

People pay many different types of taxes, which allows the ____ to provide public goods and services.

government

Taxes shift resources from private individuals and businesses to the __________ in order to pay for public goods and services, regulate the economy, and redistribute income. billionaires government largest corporations local schools

government

a ____ Savings Account allows you to set aside money in an interest-bearing account that is deducted from your paycheck and managed either by your employer or third-party organization. The money deducted is not taxed, but it must be used to cover health care costs.

health

The better your credit rating, the _____ the established limit will be on your credit cards.

higher

A home equity line of credit is a form of revolving credit in which our ____ serves as collateral. car job home jewelry

home

A home equity line of credit is a form of revolving credit in which our ____ serves as collateral. home job jewelry car

home

You should purchase renter's ___ to cover your valuables if you are renting a home.

insurance

If you pay off your credit card balance during the allowed grace period each month, you should not be charged any ____________.

interest

When purchasing a new car, it is important to consider both the monthly payment and the ____ charges

interest

_____ income is earnings generated by investments, such as savings accounts, retirement plans, and certificates of deposit.

interest

government ____ payments are paid by the government for interest on borrowed money.

interest

A _____ is an agreement that outlines the obligations of the owner and the tenants of a house or apartment. bond lease mortgage loan

lease

Financial issues are never really a ____ problem but are symptomatic of ___ issues

money heart

Credit backed by assets or equity (mortgages and auto loans) are ____ than credit cards or store cards, which are seen as "spending" credit.

more favorable

when a ___ disaster occurs, much of the work done is by volunteers. However, FEMA (the Federal Emergency Management Agency) has full-time and reserve workers that are paid staff that help to coordinate volunteer services.

natural

When we grow in relationship with ______________, we grow in relationship with God.

others

Every community needs a ____ or sheriff's department that is responsible for keeping order and enforcing laws of the locality.

police

When buying an automobile, you should get price ____ from several dealers. Find out if the amounts quoted are the prices before or after rebates are deducted.

quote

For each type of investment or savings option listed, choose either taxed or tax-deferred depending on typical government and IRS regulations. Savings account 457 plan CDs (certificate of deposit) 401k plan stock dividends money market accounts 403 plan bond dividends federal tsp roth ira

savings acc: taxed 457 plan: tax-deferred CDs (certificate of deposit): taxed 401k plan: tax deferred stock dividends: taxed money market accounts: taxed 403 plan: tax-deferred bond dividends: taxed federal tsp: tax deferred roth ira: tax-deferred

A lease is a legally-binding document that courts will generally uphold in legal proceedings, so it is important for you to know the exact terms of the lease agreement before you ___ it

sign

Taxes are a ____ opportunity

stewardship

____ wages are the wages that are considered pay for work and not benefits otherwise provided, so the taxable income is equal to or less than a person's gross pay, depending on any exempt benefits that are not taxed.

taxable

As an employee, the information on your W-2 is extremely important when preparing your tax return. Your W-2 reports the amount of federal, state and other ____ withheld from your paycheck.

taxes

What should you consider first when thinking about financing a purchase? How happy the new purchase will make you The biblical principles that guide your financial decision making Who you will impress with the new purchase How much money you have in your bank account

the Biblical principles that guide your decision making

What grants Congress the power to establish and collect taxes? Congress may not establish and collect taxes. A vote by the majority of the Senate The Constitution The current President's opinion on taxes

the Constitution

Paying taxes is biblical. What did Jesus command the Pharisees to do in Matthew 22:21? To give all of their money to Caesar To lie about the amount due to Caesar To pay what was due to Caesar To keep any money due to Caesar

to pay what was due to Caesar

It is important to note if a charity is _________ with the public about what they do before volunteering there. dishonest transparent unpopular secretive

transparent

Match each tax-deferred plan to the people who are able to participate in the plan. tsp ira 457 403 401 For people who want to put their money into a tax-deferred account at a bank or through their employer For people who work for tax exempt or non-profit organizations For people who work for state or local governments, schools, and universities For people who work for public or private for-profit companies For people employed by the federal government

tsp -> For people employed by the federal government ira -> For people who want to put their money into a tax-deferred account at a bank or through their employer 457 -> For people who work for state or local governments, schools, and universities 403 -> For people who work for tax exempt or non-profit organizations 401 -> For people who work for public or private for-profit companies

How many basic types of credit cards are available? Ten One Five Two

two

Which of the following can be considered a good time to take on debt to make a purchase? When you want to go on a tropical vacation When you are buying a house When you want a pair of shoes you can't yet afford When you have a car that runs great, but you want a newer model

when you are buying a house