Quiz about Financial Literacy Review (Pre-Algebra)

Question 1

Naomi gets a $26,000 loan in order to purchase a new car. Her loan has an interest rate of 3.5% and she has decided she will pay off the car in 5 years with monthly payments of $473. If Naomi makes her monthly payments for the next 5 years, what is the total amount that she will spend to pay off the car?

Accepted Answer

$28,380

Answer

$26,000

Answer

$455,000

Answer

$31,270

Question 2

Aaron created this table to help him estimate the total cost of his first year at a public university. Aaron's grandfather gave him a $12,000 gift to use towards his college expenses, and he received a $1,500 academic scholarship. Including his gift and scholarship, what should Aaron estimate the total cost of his first year to be?

Accepted Answer

$8,070

Answer

$5,392.50

Answer

$35,070

Answer

$21,570

Question 3

Two brothers, Marvin and Luis, each invest $5,000 into accounts that earn 5% interest. Neither brother deposits or withdraws anything from the account for 25 years. If Marvin's account earns compound interest and Luis's account earns simple interest, who will earn more interest after 25 years, and by how much?

Accepted Answer

Marvin will earn $5,681.77 more in interest than Luis

Answer

Luis will earn $11,250 more in interest than Marvin

Answer

Marvin will earn $16,931.77 more in interest than Luis

Answer

Marvin will earn $10,681.77 more in interest than Luis

Question 4

Deena wants to buy a $2,200 laptop, but she doesn't have the money. She decides to finance the purchase and will pay monthly payments of $231.55 for a year. How much extra will Deena end up paying for the laptop because she financed it rather than paying for it all at once?

Accepted Answer

$578.60

Answer

$2,778.60

Answer

$1,621.40

Answer

$463.10

Question 5

Chris is going to be a junior in high school, and the college he wants to go to costs $9,264 for tuition the first year. Chris's parents have a savings account that will cover 75% of his first year's tuition, and the rest Chris will need to pay for. If he has two years to save the money, how much should Chris save each month in order to meet his goal?

Accepted Answer

$96.50

Answer

$2,316

Answer

$193

Answer

$289.50

Question 6

Kevin financed a $2,800 vacation on his credit card. The table shows different monthly payments that Kevin is considering making, including how many months it would take him to pay off the card and the total amount he will pay in interest. Which is a correct conclusion from the table?

Accepted Answer

The more he chooses to pay off each month, the less total interest he will pay

Answer

The more he chooses to pay off each month, the higher total interest he will pay

Answer

The quicker he pays off the credit card, the more interest he will pay

Answer

The amount he chooses to pay each month will not affect the total interest he pays

Question 7

Richard wants to start a college savings account for his daughter. Which would be helpful advice to give Richard in order to help him maximize his savings amount?

Accepted Answer

Choose a savings account with compound interest rather than simple interest

Answer

Invest only for a short amount of time

Answer

Choose a savings account with a small interest rate

Answer

Regularly withdraw money from the savings account

Question 8

In the simple and compound interest formulas, what does t stand for?

Accepted Answer

time (in years)

Answer

time (in months)

Answer

time (in days)

Answer

time (in hours)

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