Banking on Your Future Post Test

EverFi – Financial Literacy Cumulative Exam Module 1: Savings 1. Use the Rule of 72 to calculate how long it will take for your money to double if it’s earning 6% in interest: a. 12yrs b. 16yrs c. 36yrs d. 72yrs FIGURE 1 Asim’s Monthly Expenses Budget School Supplies $75 Food $100 Entertainment $25 Transportation $50 Savings $25 Total $275 2. Use the table above to answer the following question: Asim earns $250 per month. Which statement below is most correct? a. Asim makes more than she spends. b. Asim spends more than she makes. c. Asim should save more in the future. d. Asim should stop saving in the future.

3. Which will most benefit you financially? a. A savings account that compound interest daily b. A savings account that compound interest monthly c. A savings account that compound interest yearly d. A savings account that does not compound interest 4. (List all letters that apply) Which of the following are examples of types of savings vehicles? a. Certificate of deposit (CD) b. Money Market Account c. Checking Account

d. Savings Account

Module 2: Banking FIGURE 2

5. Use the above figure to answer the following: The first set of numbers (74894934) on the check represents the: a. bank account number b. check number c. bank routing number d. member number 6. Use the above figure to answer the following: The set of numbers (101) on the top-right of the check represents the: a. check number b. bank account number c. member number d. the bank routing number 7. Which type of bank account typically offers no interest? a. Savings b. Money market c. Certificate of Deposit d. Checking 8. Which of the following typically have the highest fees? a. Retail Bank b. Credit Union c. Online Bank d. Payday Lender

Module 3: Payment Types, Interest Rates and Credit Cards 9. Which of the following typically has the lowest fees or costs to use? a. Debit card b. Credit card c. Cash advance d. Payday loan

10. The term referring to the rate of yearly interest for your credit card is commonly known as: a. Default rate b. APR c. COD d. Grace period FIGURE 3: Credit Card Disclosure ANNUAL PERCENTAGE RATE (APR) for purchases‥

0% (0.00000% daily periodic rate) through your first 12 billing periods. After that, a variable rate, currently equal to 18.25% (0.05% daily periodic rate).

Other APRs

Special transfer APR: A variable rate, currently equal to 18.0% (0.05% daily periodic rate).

Balance transfer APR: Same as for purchases.

Cash advance APR: A variable rate, currently equal to 27.375% (0.075% daily periodic rate).

Default APR: A variable rate, currently equal to 36.5.% (0.1% daily periodic rate).

See explanation below.‥

Variable Rate Information

Your purchase APR may vary quarterly. The rate will be determined by adding 5.65% to the Prime rate. Your special transfer segment APR may vary quarterly.

The rate will be determined by adding 5.65% to the Prime rate. Your cash APR may vary quarterly. The rate will be determined by adding 11.55% to the Prime rate. Rates in effect 10/01/07. Your default APR may vary monthly. The rate will be determined by adding 19.9% to the Prime rate.

Rate in effect 11/01/07.

Grace period for repayment of the balance for purchases.

30 days from the date of the periodic statement on new purchases (provided you have paid your previous balance in full by the due date). Same as your billing cycle.

Method of computing the balance for Adjusted balance (including new purchases). purchases.

Annual Membership Fee

None.

Minimum finance charge

For each Billing Period that your Account is subject to a finance charge, a minimum total FINANCE CHARGE of $0.50 will be imposed.

Miscellaneous Fees

Cash advance fee: 3% of amount of the cash advance, but not less than $5.

Transfer fee: None.

Late payment fee: Your late payment fee will be based on the amount of your account balance at the time the fee is applied. Balance of $0 - $99.99 = $20 fee; balance of $100 - $999.99 = $30 fee; balances of $1,000 or more = $40 fee.

Over-the-limit fee:

None.

11. Use the Credit Card Disclosure to answer the following: What is the customary APR on purchases after the initial 12 months? a. 36.5% b. 27.357% c. 18.25% d. 5.65%

12. Use the Credit Card Disclosure to answer the following: What is the annual fee for this card? a. $0 b. $5 c. $29 d. $39

Module 4: Credit Scores 13. Your credit history is tracked by all of the following EXCEPT: a. Equifax b. Federal Reserve c. Experian d. Trans Union 14. (List all letters that apply) Good credit is usually required for which of the following:

a. Buying a new car b. Getting a credit card c. Buying new furniture

d. Purchasing a home e. Adopting a pet f. Renting an apartment

15. (List all letters that apply) Which of the following could potentially damage your credit score?

a. Paying a credit card bill late b. Paying a roommate back c. Paying a speeding ticket

d. Opening a checking account e. Opening 3 credit cards at once f. Ignoring a late payment notice

Module 5: Financing Higher Education 16. The form filed by students to receive federal financial aid for school is known as: a. FAFSA b. FIFA c. FICO d. FAA 17. Borrowing a subsidized federal student loan means: a. The government will repay the loan in full provided you graduate. b. The government will pay the interest on the loan until 6 months after you graduate. c. The government will repay the loan if you take a certain type of job after you graduate. d. The government will pay the loan as long as you have steady full time employment after you graduate.

18. Which of the following is an advantage of federal student loans? a. Federal student loans have a fixed interest rate. b. Federal student loans are only available to students who can demonstrate financial need. c. Federal student loans must be paid back while you’re in school. d. Federal student loans do not accumulate interest.

19. The period before you have to begin repaying your student loans is known as the: a. default period b. zero interest period c. grace period d. promotional period

Module 6: Renting vs. Owning 20. Which statement is most correct when choosing to rent or buy a home? a. Rent a home only until you can afford to buy one. b. Buy a home because it is better than renting one. c. Rent a home because it is better than buying one. d. Buy or rent a home based on your individual circumstance.

21. Which of the following statements is most correct? a. A benefit of owning a home is that it is easier to move. b. A benefit of renting a home is that you can make renovations to the home. c. A benefit of owning a home is that the value may appreciate. d. A benefit of renting a home is that you can move out whenever you want.

22. What are the responsibilities of a renter versus an owner? a. A renter living in a house has complete responsibility and control over the property. b. An owner of a house has complete responsibility and control over the property. c. Neither a renter nor an owner has any responsibility and control over the property – it’s completely controlled by the government. d. Both a renter and the owner have equal responsibility and control over the property.

23. (List all letters that apply) Which of the following should you take into consideration when deciding to buy or lease a car?

a. Cost of the car b. Monthly loan payment c. Your monthly budget

d. Car interior and features e. Down payment f. Your current savings

Module 7: Taxes and Insurance 24. Which form is your employer required to send to you before you file your tax return? a. Yearly paycheck stub b. 1040EZ c. W-4 d. W-2

25. Isaiah needs to visit the doctor. The cost of the appointment without insurance is $200.

Isaiah has an insurance plan through his employer with a $50 monthly premium and $20 co-pay. How much will Isaiah have to pay his doctor? a. $0 b. $20 c. $50 d. $200 26. By what date must federal taxes typically be filed and sent to the IRS? a. March 17 b. April 1 c. April 15 d. March 15 27. Which of following drivers will likely pay the highest auto insurance premiums? a. Younger, inexperienced drivers b. Older, experienced drivers c. Drivers who have a safe driving records d. Drivers who travel short distances

Module 8: Consumer Fraud 28. How often are you entitled to a free credit report from each of the major credit reporting companies? a. Yearly b. Monthly c. Whenever you use credit d. Prior to making large purchases 29. Which of the following provides the best protection against identity theft? a. Open up a new bank account every year b. Shred documents that contain personal information c. Pay all bills with cash only d. Never use a credit card 30. Which piece of information is most useful to an identity thief? a. Your full name and address b. Your full name and date of birth c. Your full name and social security number d. Your full name and student ID number 31. Which of the following steps best protects your credit history if you suspect fraud? a. Contact the credit bureaus and report suspected fraud b. Contact the store where your credit card was used and request a refund c. Contact the local police department and file a complaint d. Contact the chamber of commerce and close your bank account

Module 9: Investing 32. When buying a stock in a company, you are: a. diversifying your portfolio b. investing in an index fund c. loaning money to a company d. buying a portion of a company 33. When you purchase a municipal bond, you are: a. buying a portion of a municipality b. diversifying your portfolio c. investing in an index fund d. loaning money to a municipality 34. The main trade-off that all investors must consider is: a. income vs. cost b. diversity vs. uniformity c. stocks vs. bonds d. risk vs. return 35. Diversification is important in investing because‌ a. It helps you to balance your risk across different investment types. b. It increases your overall risk, which guarantees that you will make more money. c. It ensures that you only make low-risk investments. d. It helps you gain the highest rate of return despite any risks.