Basic Financial Concepts Quiz

What is interest?

• The amount of money you have in your savings account

• The fee you pay for using a credit card

• The money earned or charged for borrowing or investing money

What's the difference between a debit card and a credit card?

• A debit card allows you to spend money you have, while a credit card allows you to borrow money up to a certain limit

• A debit card has higher interest rates than a credit card

• A debit card is only used for online purchases, while a credit card is used for in-person transactions

What is a savings account?

• An account used to borrow money

• An account used to save money for long-term goals

• An account used for daily spending

How do you calculate interest on a loan?

• Multiply the principal by the annual interest rate

• Divide the principal by the annual interest rate

• Add the principal and the annual interest rate

Why is budgeting important?

• It helps you keep track of your spending and saving

• It's only important for adults

• It's a requirement for getting a credit card

What is a credit score?

• A number that indicates your ability to pay bills on time and manage debt

• The amount of money you owe on your credit card

• The number of credit cards you have

What is the purpose of an emergency fund?

• To save money for vacations

• To have money set aside for unexpected expenses or emergencies

• To invest in the stock market

What does "paying yourself first" mean?

• Spending all your money on yourself

• Putting a portion of your income into savings before paying bills or spending on other things

• Giving money to friends before paying your own expenses

Why is it important to start saving money early?

• Because you'll have more money to spend later

• Because saving money is a requirement for adults

• Because it allows your money to grow over time through compound interest

What is a budget?

• A plan for spending and saving money

• A type of loan

• A bank account specifically for teenagers