EverFi Module 1 - Savings - Final Quiz Answers

To earn as much interest as possible, you should open a savings account that earns _______ interest and has the ______ interest rate.

compound; highest*

Which of the following is considered a "need"?

food

Joy is taking out a car loan which she will pay back with interest. Which option will require her to pay the lowest amount in interest?

A.) Annual Compounding*

Your friend is overspending and in need of a budget. What type of expense should they reduce next month?

A.) Going to the movies with friends.*

John just opened a savings account and wants to maximize the amount of interest he earns. Which of the following actions would enable him to earn MORE interest?

A.) Selecting an account with a high interest rate. B.) Leaving his money in the account for long period of time.

The purpose of a budget is to:

A.) help you plan how you will spend the money you earn or receive.*

Which of the following is the most important consideration when planning your budget?

Budget for your needs before your wants.*

Which of the following is a type of savings vehicle?

Certificate of Deposit Money Market Account

Tamara has $500 she is looking to save for a class trip. She wants to earn the most possible interest and will not need access to her money for a full year. Which type of savings account will be best for Tamara?

Certificate of Deposit (CD)*

Which of the following accounts will give you the LEAST access to your money?

Certificate of Deposit (CD)*

Which of the following savings vehicles usually requires a high minimum balance?

Certificate of Deposit (CD)*

Jorge has $300 for work he performed. He expects to spend the money in the next few weeks to buy a new bike. Which type of account will be best for Jorge?

Checking Account*

Which type of account typically has very high liquidity, low or no interest, and low minimum balance?

Checking Account*

You are opening a savings account that earns compound interest. Which compounding frequency will earn you the MOST money?

Compounding daily*

Anthony is deciding between different savings accounts at his bank. He has four options, based on how frequently interest compounds. Which should he choose if he wants the best rate of return on his interest?

Daily Compounding*

Which of the following is considered a "want"?

Designer Sneakers*

What is the typical relationship between time and interest rate?

Longer time period usually equals higher interest rates.*

Which of the following is generally true about savings vehicles?

People should evaluate different forms of savings vehicles based on their needs.*

When it comes to saving money, what is a good rule of thumb?

Put aside money for savings each month*

Interest is:

The amount owed for borrowing money