Financial Literacy

Which of the following is a variable expense?

• Student loan payments

• Groceries

• Rental payments

• Health insurance

When you read a credit application (i.e. credit card, mortgage) and it says the loan is accompanied with a 20% Annual Percentage Rate (APR). What does this mean?

• You'll pay 20% of your income on the loan each year

• The bank will only charge you 20% of the loan each year

• The bank will pay you 20% of what you charge while you have the loan

• You'll pay 20% of the amount you sill owe on the loan in interest each year

I avoid paying a PMI if I make a down payment of __________________ or more.

• 0%
• 5%
• 10%
• 20%

Which of the following is a fixed expense?

• Clothing purchases

• Groceries

• Rental payments

• Movie tickets

The purpose of a budget is to:

• help you plan how you will spend the money you earn or receive.

• stop you from spending too much money.

• increase the balance of your savings account

• tell you how much you owe the government in taxes

Money you earn, like money you may get from your birthday or allowance from your parents.

• Income
• Salary
• Wage
• Tuition

What percent of your monthly NET income should your monthly mortgage, taxes, and insurance be?

• 45% - 50%

• 40% - 45%

• 35% - 40%

• Less than 35%

Interest is:

• a charge for lending money to a bank

• the amount owed for borrowing money

• the amount added into your savings when opening a bank account

• a charge for the convenience of accessing money stored in your bank account

Which of the following can increase your credit card's APR

• Paying the minimum

• Missing a credit card payment

• Paying off the full balance

• Cashing in on rewards points

An unchanging rate that is locked in when you purchase a loan

• Fixed interest rate

• Variable interest rate

• Locked interest rate