Financial Literacy Test

Front

What is Net Worth?

Back

Net Worth is the value of one's assets minus one's liabilities.

Front

How do you calculate Simple Interest?

Back

Simple Interest = Principal x Rate x Time. For example, if you invest $2,000 at an 8% interest rate for 5 years, the interest earned is $800.

Front

What does it mean to subtract a discount from a price?

Back

Subtracting a discount means reducing the original price by the discount amount to find the final price.

Front

If a T.V. costs $990 and has a 9% sales tax, what is the final price?

Back

Final Price = $990 + ($990 x 0.09) = $1,079.10.

Front

What is a fixed income?

Back

Fixed income refers to investments that provide regular, fixed payments, such as bonds.

Front

What is gross income?

Back

Gross income is the total income earned before any deductions or taxes.

Front

What is the formula for calculating Net Worth?

Back

Net Worth = Total Assets - Total Liabilities.

Front

What is the difference between assets and liabilities?

Back

Assets are what you own (e.g., cash, property), while liabilities are what you owe (e.g., loans, debts).

Front

What is a sales tax?

Back

Sales tax is a tax imposed on the sale of goods and services, usually calculated as a percentage of the purchase price.

Front

What is the purpose of budgeting?

Back

Budgeting helps individuals plan their finances by tracking income and expenses to ensure they live within their means.