Interest
What is APY?
Annual Percentage Yield, annual interest rate at which your interest is earn.
What is the range of credit score?
300-850
Difference between credit and debit cards?
Debit cards take money right from your account, credit cards are paid a month after the purchase.
What is the rule of 72?
Is liquidity of a savings account high or low?
Liquidity is high, easy to access
What is the difference between simple and compound interest?
Simple interest only earns interest on the money you deposited, compound interest earns interest on the whole account, not just the money you deposited.
TRUE or FALSE: The higher the credit score, the worse it is?
False
The least amount of money you can pay your debt for your credit card.
What is the equation for The Rule of 72?
72/Interest Rate
What is the maximum amount of money the FDIC can insure you?
$250,000
If your money earns simple interest at 100%, and you deposit $100 to your account, how much money would you have if your money earned interest 3 times?
$300, $100 each time it earns interest
If someone has never missed a payment on their credit cards, would that increase or decrease your credit score?
Increase
If you pay off your credit cards right away, is the bank charging interest on you?
No, paying it off in full won't cause interest to be added
If you put $500 in a savings account with an interest rate of 2.3%, many years will it take double your money? (Round to the nearest percent)
31%
What is one thing that the FED controls?
1 Interest rates
2 Amount of currency circulation
3 Inflation
You put $1,000 into your account, it earns compound interest at 100%, and your money earns interest 4 times, how much money did you earn?
1st time: $1,000
2nd time: $2,000
3rd time: $4,000
4th time: $8,000
To determine credit score, what are the two most influential and makes up about 65% of your credit score?
Payment History and Total Debt
When your credit card bill comes and you only pay the minimum amount, are you paying more than the original price?
Yes, not paying in full creates interest that will be added to your purchases, ending up paying more than it's original cost
If you put $15,000 into a CD account with an APY of 18%, how many years would you need to keep it in there for your money to double?
4 Years
If you have money that you won't need access to, but want a high interest rate earned on your money, where should you put it?
CD would be the best choice because liquidity is extremely low, locked in for a specific time, earns high interest rate.
What will make you more money over time, putting $1,000 into an account that earns simple interest at 10%, or putting it in an account that earn compound interest at 10%?
Putting it an account that earns compound interest
If someone has a credit score of about 700, is that person creditworthy?
Yes
What is the minimum amount you can pay for your credit card debt?
3% of that total, it would takes months and even years to fully pay it off
When you were born, your parents put $5000 into a stock that earns 9% interest each year. When you are 24 years old, how many times would your money have doubled?
3 years
You wants to buy the new video game console. The console comes out in just a few months. You currently hide your money under your mattress. You are afraid that your younger brother might steal your money. You wants to buy the console the day it is released. Where should you store your money?
In a savings account because your money will be safe there and you can access your money whenever you need.