Personal Financial Literacy Test Form B

How much would Vincent have in his account after three years if he started with $100 and earns 5 percent, compounding annually?

$115.76

Anthony wants to be better at saving his money. Name at least five tips you could suggest to help him save.

1. Making responsible purchases 2. Keeping your money in a safe spot 3. Knowing how much money you need to save 4. Have a savings account

Claim

A request for payment from an insurance company

A stock broker _____.

Buys and sells stock

Jordan wants to know how long it will take for the money she deposited to double. She has an interest rate of 4 percent. Calculate how long it will take her money to double.

Eighteen years

Select all the reasons an individual would save his or her money in a CD.

High intrest rates, Safe, No fees

Select all the types of retirement accounts.

IRA, 401(k), 403(b)

Using money to try to make more money is called _____.

Investing

Diverseification

Investing in a variety of investments in order to limit losses in the event of a sharp decline in a particular type of investment

An online savings account _____.

Offers higher interest rates because they don't have the overhead that standard banks have

The amount with which an individual starts an investment is called the _____.

Principal

Liquidity

The ease with which an investment can be turned into cash without losing its value

Return

The profit or gain from saving or investing money

529 Plan

a savings plan for education designed to help set aside funds to pay for future college costs

The annual percentage yield (APY) is the _____.

amount of interest you'll earn in one year from a savings account