Rule of 72
The Rule of 72 helps you figure out ____
How long it takes your money to double with interest.
What is a budget?
Answer: A plan for how to spend and save your money.
What does it mean to invest money?
Answer: To use money to try to earn more money over time.
What is “risk” in money terms?
Answer: The chance you could lose money.
What is a credit score, and why is it important?
Answer: It shows how responsible you are with money and affects your ability to borrow.
What’s the Rule of 72 formula?
72 ÷ interest rate = years to double your money.
Name 2 things you might include in a budget.
Answer: Rent, food, savings, clothes, etc.
What is a stock?
Answer: A share in a company that you can buy.
What is “reward” in investing?
Answer: The money you could gain.
What is the difference between a debit card and a credit card?
Answer: Debit uses your own money; credit borrows money you must pay back.
If you earn 6% interest, how long until your money doubles?
Answer: 12 years (72 ÷ 6 = 12).
If you earn $100 and spend $90, what percent do you save?
Answer: 10%
What happens to stocks when the stock market goes up?
Answer: Most stocks become more valuable.
What’s one way to lower your risk when investing?
Answer: Spread your money out (diversify).
Why is it important to have an emergency fund?
Answer: It helps cover surprise expenses like car repairs or medical bills.
True or False: A higher interest rate means your money doubles faster.
Answer: True.
What does “needs vs. wants” mean in budgeting? (1 example of each)
Answer: Needs are must-haves like food, wants are extras like video games.
What are 2 reasons people invest in the stock market?
Answer: To grow their money.
True or False: Risk and reward are usually connected.
Answer: True. Bigger risks can lead to bigger rewards, but also can lead to losses.
What does “pay yourself first” mean in personal finance?
Answer: Save a portion of your income before spending on anything else.
If your money doubles in 9 years, what interest rate are you earning?
8% (72 ÷ 9 = 8)
What happens if you spend more money than you earn?
Answer: You go into debt.
True or False: Stocks always go up, but have risks
Answer: False.
Why is it risky to put all your money in one stock?
Answer: If it loses value, you lose a lot of money.
What is compound interest, and why does it matter for saving or investing?
Answer: It means you earn interest on your interest, helping your money grow faster over time.