midterm review personal finance

School A has sticker price of $52,000 and an average net price of $6,000 for families with income of less than $60,000. Meanwhile, School B has sticker price of $22,000 and an average net price of $11,000 for families with income of less than $60,000. If your number one factor in selecting a school was cost and your family income was under $60,000, which school would you choose?

School A

Jennifer is trying to save up for an emergency fund of $3000. Which saving strategy would likely be most effective in helping her meet her goal?

Set up a direct deposit of $75 from each paycheck to automatically get put into her savings account instead of her checking account

Your wealthy grandma gives you a $500 check for your middle school graduation, and you deposit it into your savings account which earns 1% compounding interest. You keep it there for 4 years until you're heading off to college and want to buy some dorm supplies. How much money do you have available? You can ignore inflation and assume no bank fees during this time.

Slightly more than $520

Which of the following is a method of spending the money in your checking account?

Write a check for your purchase

Choose the BEST answer: Which of these represents a major convenience of using a mobile banking app?

You can deposit physical checks by using your phone to take a picture of the front and back and sending it through your mobile app

When you have liability coverage with your auto insurance policy...

Your insurance will cover the payment for your neighbor's fence repair if you crash into it backing out of the driveway

Which person from this list is saving rather than investing?

Yvonne, who puts $750 per month into her bank account earning 1% interest

Susie works two jobs so she can pay tuition without using loans, helps her sick mother with housework and errands, and is attending college. She knows she should be saving for retirement. Which strategy is best for Susie?

auto-invest a small fixed amount in Roth IRA every month

Mia is opening her first checking account, and she's trying to decide whether she should sign up for overdraft protection. Which friend's advice is most accurate?

Frank says, "Overdraft protection is handy if you have an emergency (like needing gas to get to work) and don't have the funds right now."

Jay asks his friends for advice: "Should I start doing mobile banking now that I've got my new smartphone?" Which friend is correct in their statement on the benefits of mobile banking?

It's so convenient, because you can deposit your check using your phone's camera and the bank's app

StayWell Health Insurance is offering a plan with a monthly premium of $250, a deductible of $3500, and maximum out-of-pocket expenses of $6000. If Sheldon chooses this insurance, what is the MOST he should pay in one calendar year?

$9,000

Which of these would represent a withdrawal you could see on your monthly checking account statement?

A debit card purchase for concert tickets you bought online

Which statement accurately describes the difference between a traditional savings account and a certificate of deposit?

A traditional savings account keeps your money safe and allows you to add to the balance regularly. A CD requires a fixed deposit amount for a fixed period of time.

Fatima is looking forward to college graduation in the spring but knows she'll need to start thinking about how to pay her student loans. Which is the best approach for Fatima?

Always select the standard repayment plan because it will result in the least amount of interest

When using online and mobile banking, which of these is a smart tip to keep your account safe?

Choose clever and secure usernames and passwords, and keep them secret

Marcia works a part-time job during her junior and senior years of high school. Although her main goal is to save enough for a really nice laptop, she'd also like to build up an emergency fund. She wants to have at least $500 to take with her in case she needs it during college. Which saving strategy is most likely to help Marcia meet her goal?

Determine how much she needs to save from every paycheck to afford the laptop and the emergency fund, and then auto-deposit that amount into a savings account so she can't spend it

You've just turned 16 and obtained your first part-time job. You want to open a checking account as well as a savings account. Which of these questions is LEAST important to ask?

Does the bank you're considering also have an investments division that can help you compound your money quickly?

Igor receives his Financial Aid Award Letter and notices Federal Work-study in the amount of $2000. What does this mean?

He is eligible to take a paid work-study job while he attends college, with the expectation that he will use his earnings toward college-related costs

Marcellus is going into his senior year, and he's not sure whether he intends to start college the fall after graduation or take a year off first. How should he approach the FAFSA this school year?

He should file this fall regardless of what he decides; that way he has an opportunity for financial aid just in case

Which of the following most accurately describes robo-advising?

It uses software to automatically adjust your asset allocation based on your preferences

Using Target Date Funds can be beneficial for beginner investors, because...

It will automatically adjust your assets for you over time.

Which statement about student loans is TRUE?

It's financially better to pay for college using scholarships and grants than it is to use loans

Super Smarts University has a sticker price of $45,000 per year. Kyle is applying there and uses their online net price calculator, which calculates a net price of $38,000 per year based on the information he is provided. He's #1 in his high school class, and he's got great SAT scores; so he's pretty sure he'll get in. How much will Kyle pay to attend?

It's impossible to know how much he'll pay until he receives his financial aid package

Ryan has a major problem of overspending from each of his paychecks, even though his ultimate goal is to be saving money for college. His friend Sydney says Ryan's problem is that he's too worried about "keeping up with the Joneses." What does Sydney mean by this?

Ryan is buying too many material things or spending too much on experiences so that he feels on par with his peers

In which order do you want to apply for and accept aid to pay for college?

Scholarships & grants, work study, federal student loans, private student loans

Which statement accurately describes the difference between a student loan and a scholarship or grant?

Student loans need to be repaid, while scholarships and grants are both "free money" that don't need to be repaid

Which definition best describes the FAFSA?

The application you complete in order to determine eligibility for federal student aid

Which statement about overdraft protection is true?

The average overdraft fee is $25 or more

If your auto loan is amortized over 5 years, you will pay ______.

The same size payment each month

Which item would you expect to find on your monthly bank statement?

The total amount of deposits you made during that month

Zoe buys three new lipsticks from a store at the mall. Which payment method would reduce the amount of money in her checking account?

Uses her debit card and says, "Credit" when the cashier asks, "Credit or debit?"