Investing Lesson 1-3 Intro

You have $100 in your savings for one year & a interest rate of 6%. How much $ will you earn?

• $5
• $4
• $6
• $2

At a compound interest rate of 5% how many years will it take to double your money?

• 4.4 years
• 14.4 years
• 7.0 years
• 10.0 years

What are 3 criteria most often used by investors to judge personal investments?

• Buying, spending, selling
• Liquidity, Return, Selling
• Return, Risking, Selling
• Liquidity, Risk, Return

Which of the following is an example of investing?

• Putting money into a piggy bank at home
• Saving spare change and using it to buy snacks
• Buying a U.S savings bond
• Buying groceries for the family

What is the difference between Economic Investing (EC) and Personal Investment (PI)?

• There is no difference
• Economic Investment involves risk
• Economic Investment involves technology/ PI involves stocks
• Personal Investment involves risk

Which of the following is not an investment?

• Buying 100 shares of Microsoft Inc.
• Buying a Microsoft bond, which promises to pay back the $
• Buying a bond issued by the government of Mexico
• Buying a hamburger for lunch

What are the two ways to pay interest?

• Compound/ Complex
• Simple/ Complex
• Compound/ Investing
• Simple/ Compound

Formula for Simple Interest?

• Interest= Principal x Rate x Time
• Interest=Rate x Time divided by Principal
• Interest= Principal x Rate divided by Time
• Interest= Principal x Time divided by Rate

What term is used when referring to when compound interest doubles? Formula?

• Rule of 78 (72 divided by rate=# of years for $ to double)
• Rule of 86 (86 divided by rate=# of years for $ to double)
• Rule of 72 (72 divided by rate=# of years for $ to double)
• 300 divided by rate=# of years for $ to double

2 main types of Investing?

• Personal/ Educational
• Educational/ Economic
• Personal/ Economic
• Economic/ Global