Personal Financial Literacy Review

Front

What is a debit card?

Back

A debit card is a payment card that deducts money directly from a consumer's checking account to pay for a purchase.

Front

Do debit cardholders pay interest on their purchases?

Back

No, debit cardholders do not pay interest on their purchases.

Front

How can a credit cardholder avoid paying interest?

Back

By paying the balance in full every month.

Front

What is the impact of paying bills late on credit history?

Back

Paying bills late can negatively affect your credit history.

Front

What does 'A' represent in the compound interest formula A = P(1 + r)^t?

Back

A represents the total amount of money after a certain amount of time.

Front

What information is contained in a credit report?

Back

A credit report contains personal information such as your address, social security number, and credit history.

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What is the difference between a credit card and a debit card?

Back

A credit card allows you to borrow money up to a certain limit, while a debit card uses your own money from your bank account.

Front

What is compound interest?

Back

Compound interest is the interest on a loan or deposit calculated based on both the initial principal and the accumulated interest from previous periods.

Front

What is the formula for calculating compound interest?

Back

A = P(1 + r)^t, where A is the amount of money accumulated after n years, including interest, P is the principal amount, r is the annual interest rate, and t is the time in years.

Front

What is a credit score?

Back

A credit score is a numerical representation of a person's creditworthiness, based on their credit history.