Financial Literacy

Suppose you have $100 in a savings account earning 2 percent interest a year. After five years, how much would you have?

• $110.40
• $105.00
• $102.00
• $108.00

Answer explanation

Imagine that the interest rate on your savings account is 1 percent a year and inflation is 2 percent a year. After one year, would the money in the account buy more than it does today, exactly the same or less than today?

• more than today
• exactly the same
• increased
• less than today

True or false: A 15-year mortgage typically requires higher monthly payments than a 30-year mortgage but the total interest over the life of the loan will be less.

• True
• A 15-year mortgage typically requires lower monthly payments than a 30-year mortgage
• False
• A 15-year mortgage typically requires the same monthly payments as a 30-year mortgage

True or false: Buying a single company's stock usually provides a safer return than a stock mutual fund.

• Stock mutual funds are always safer
• It depends on the company
• True
• False

Suppose you owe $1,000 on a loan and the interest rate you are charged is 20% per year compounded annually. If you didn't pay anything off, at this interest rate, how many years would it take for the amount you owe to double?

• 3.8
• 7.6
• 5.2
• 2.5

We should keep our savings with banks because

• Banks provide security for our savings.
• Banks charge high fees for keeping our savings.

Bank provides loans for

• Home

• Education

• Four/Two Wheeler

• All

The safest place for keeping money

• bank
• buried in the backyard
• in a shoebox
• under the mattress

Currency notes are issued by

• Central banks or RBI

• Credit unions
• Investment banks
• Commercial banks

Who can open bank account ?

• Individual

• Only individuals over the age of 18
• Illiterate Persons

• All