Rule of 72
This rule helps you estimate how long it takes to double your money at a fixed interest rate.
Rule of 72
What is the purpose of a budget?
To plan and control how money is spent and saved
Is putting money in a bank account saving or investing?
Which type of interest is only calculated on the original amount (principal)?
Simple
When you use a credit card, you’re doing this with money.
borrowing
If your investment grows at 6% per year, your money will double in approximately how many years?
12 years
The “50-30-20” rule recommends spending 20% of your budget on this.
savings and debt repayment
Why is it risky to keep all your long-term money in savings?
Loses value due to inflation.
Which type of interest earns interest on both the principal and the interest earned
Compound Interest
What kind of bank account helps kids save money with the help of a parent?
Savings Account
What is the formula used in the Rule of 72?
72 divided by the interest rate
Which budgeting method helps you spend only what you’ve set aside in cash for each category?
Envelope System
What are 3 EXAMPLES of investing?
Stocks, real estate, crypto.
You invest $1,000 at 5% simple interest for 2 years. How much interest do you earn? How much do you have after 2 years?
$1100
This kind of card pulls money directly from your bank account.
Debit Card
Using the Rule of 72, an interest rate of 12% will double your investment in how many years?
6 years
What’s a major benefit of tracking every expense?
You can find wasteful spending and adjust your habits
The higher the potential return, the higher the potential (blank) from (blank)
Risk; Investing
If you are BORROWING money, which interest type is usually better for you? Why?
Simple interest, because it costs less over time. Doesn't accumulate.
What is a credit score used for?(Bonus 100: What is the range of a score)
See how well you pay back money; 300-850
True or False: The Rule of 72 works best with high interest rates over 20%.
False
Calendar budgeting helps you manage your cash flow. What does that mean?
Knowing when money comes in and when bills are due so you don’t run out
What is one way to lower the risk of investing while still growing your money?
Diversification(spreading money across different investments)
Which type of interest benefits you more if you're investing over 20 years—simple or compound? Why?
Compound interest, because it grows exponentially over time.
This country was the first to use paper money over 1,000 years ago.
China