Personal Financial Literacy Practice

Front

What is net worth?

Back

Net worth is the difference between total assets and total liabilities. It represents the value of an individual's or entity's financial position.

Front

How do you calculate net worth?

Back

Net worth = Total Assets - Total Liabilities.

Front

If Art has total assets of $68,770 and total liabilities of $34,295, what is his net worth?

Back

$34,475.

Front

What is 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

How do you calculate the total cost including sales tax?

Back

Total Cost = Price + (Price × Sales Tax Rate).

Front

If a ski hat costs $19.50 and ski boots cost $85.50, what is the total cost before tax?

Back

$105.00.

Front

What is the maximum percentage of income that should be spent on rent according to financial planners?

Back

No more than 30% of monthly income.

Front

If the Thorn family has a monthly income of $4,150, what is the maximum they should spend on rent?

Back

$1,245.

Front

What is the purpose of a financial planner?

Back

A financial planner helps individuals and families manage their finances, set financial goals, and create plans to achieve those goals.

Front

What is simple interest?

Back

Simple interest is calculated on the principal amount only, not on the interest accrued over time.