Personal Finance 5.00 Saving and Investing

Front

Compound interest is best defined as:

Back

earning interest on interest

Front

Which statement best reflects the philosophy of “pay yourself first”?

Back

An individual should set aside a predetermined amount of money for saving before using any of that money for spending.

Front

Liquidity

Back

How quickly and easily an asset can be converted into cash

Front

Which concept best explains compounding interest?

Back

Earning interest on interest

Front

When a goal has been set to save $100.00 a month for an emergency fund of $2,000.00, giving up food from the vending machine to achieve that goal is the:

Back

trade-off

Front

When taking advantage of the time value of money, which strategy is most likely to result in the largest return?

Back

Invest as long as possible and at the highest interest rate possible.

Front

What is a tiered interest rate in a money market account?

Back

The amount of money he earns depends on the balance, i.e. the higher the account balance the higher the interest rate he would earn.

Front

How liquid is a savings account compared to other options?

Back

More liquid than a certificate of deposit

Front

Savings tool for managing everyday purchases that is very liquid and accessible.

Back

Checking account

Front

Which correctly describes the security level of savings tools?

Back

Savings tools are secure because they are protected by the U.S. government against loss.