Finance Unit 2b: Money Management - Budgeting, Interest Rates, Comparison Shopping Review

Question 1

Use the Rule of 72 to calculate how long it will take you to triple your money.

Accepted Answer

False

Question 2

Comparing store ads to find the better deals is known as

Accepted Answer

comparison shopping

Question 3

Costs that vary in amount and type, depending on the choices you make are called

Accepted Answer

variable expenses

Question 4

If you are borrowing money, it is better to have a higher interest rate.

Accepted Answer

False

Question 5

Use the Rule of 72 to estimate how long it will take you to double your money.

Accepted Answer

True

Question 6

An amount of money owed to other people.

Accepted Answer

liability

Question 7

Using the Rule of 72, how long will it take you to double your money if you earn 8% interest?

Accepted Answer

9 years

Question 8

To determine your net worth, you

Accepted Answer

subtract liabilities from assets

Question 9

A set of goals for spending, saving, and investing the money you receive is called

Accepted Answer

a financial plan

Question 10

Costs that do not change from month to month are called

Accepted Answer

fixed expenses

Question 11

An emergency fund should be established after you begin investing.

Accepted Answer

False

Question 12

Which of the following would not be a reason to have a budget?

Accepted Answer

Help you spend money carelessly.

Question 13

If you are investing money, it is better to have a higher interest rate.

Accepted Answer

True

Question 14

To prepare a good budget, you should do all of the following, except:

Accepted Answer

Spend money carelessly.

Question 15

A cost you are required to pay at a specific time, regardless of other events.

Accepted Answer

fixed expense

Question 16

Which method of calculating interest is better for the borrower?

Accepted Answer

simple interest

Question 17

Using the Rule of 72, how long will it take to double your money if you earn 12% interest?

Accepted Answer

6 years

Question 18

Creating a budget can help with all of the following, except:

Accepted Answer

spending money carelessly

Question 19

Having more money at the end of the month is known as a

Accepted Answer

cash surplus

Question 20

Which method will give the investor more money at the end of the investing period?

Accepted Answer

compounding interest

Question 21

How many months worth of income should an emergency fund have in it?

Accepted Answer

3-6

Question 22

Compound interest is paid on the accumulated unpaid interest and principal amount.

Accepted Answer

True

Question 23

A spending and savings plan based on your expected income and fixed/variable expenses is a

Accepted Answer

budget

Question 24

Interest is paid only on the principal amount of money invested.

Accepted Answer

Simple Interest

Question 25

An item of value that a person owns is known as:

Accepted Answer

an asset

Question 26

A cost that varies in amount and type, depending on the events and choices a person makes.

Accepted Answer

variable expense

Finance Unit 2b: Money Management - Budgeting, Interest Rates, Comparison Shopping Review

Questions 26

Finance Unit 2b: Money Management - Budgeting, Interest Rates, Comparison Shopping Review

Questions 26