How Financially Literate Are You?
Take this quiz to learn how much financial prowess you have. Share with your colleagues to see who gets the ultimate bragging rights.
Accumulated Interest: Part I. You have $100 in a savings account which earns 2% annual interest. After one year of accumulating interest, how much money is in the savings account?
Accumulated Interest: Part II. You have $100 in a savings account which earns 2% annual interest. After ten years of accumulating interest, how much money is in the savings account?
Inflation: Part I. Your savings account, which earns 2% annually, grows gradually. However, inflation currently runs at 3%. After one year at the 3% inflation rate, is the money in your savings account able to buy more, less or the same as the day you deposited the money?
Inflation: Part II. In a year when inflation rises at 2% and your paycheck rises by 3%, are you able to purchase more, less or the same amount of goods and services at the end of the year?
Mortgages: Part I. You want to pay as little interest as possible on a home mortgage, regardless of the monthly payment. Do 30-year mortgages or 15-year mortgages have lower interest rates?
Mortgages: Part II. How much down payment do you need to purchase a home without having to pay for mortgage insurance?
Interest Rates: Part I. When the interest rate on a bond rises, what happens to the price of the bond?
You have $1,000 and want to use this cash to buy a bond. The annual interest rate on the bond is currently 3%. However, you hear on the news that interest rates are going to rise soon. Should you wait to buy the bond, or buy it before interest rates rise?