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Personal Finance: Chapter 2 - Saving Flashcards | StudBud
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Personal Finance: Chapter 2 - Saving
Personal Finance: Chapter 2 - Saving
30 terms
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This quiz coordinates to chapter 2 of the Dave Ramsey videos.
Flashcards
30 cards
F
Practice quiz
P
Host live
L
Questions
30
Answers
1
Saving is about
contentment and emotion
contentment and earning more money
making more money and discipline
pride and greed
2
T or F An emergency fund is intended to grow wealth.
True
False
3
A negative savings rate means
having a full emergency fund
having no savings
spending more money than you make
saving for a want instead of a need
4
Using the sinking fund, determine your monthly budget to save $1,200 in the next year.
$100
$200
$1,200
There is too little information given to determine this
5
Which of the following is NOT a reason to save?
Large purchases
Building wealth
Emergencies
To go to the movies
6
The letter that represents the interest rate
i
r
n
t
7
Why is it so important to have an emergency fund?
To have money for unexpected financial emergencies
To have money for large purchases
You don't need an emergency fund if you have a good job.
None of the above
8
Time value of money means
$ today will buy you less than the same amount in the future
money placed in a time capsule increases
the longer you have it, the more you want to spend it
money you have today will be worth the same in the future
9
Emergency funds for adults should include
one year worth of salary
$5,000
$500
3-6 months of expenses
10
An account that generates interest income on the available balance in the account
interest-bearing account
emergency fund
CD
financing
11
The rise in the cost of goods and services is
an expectation of our economy
ridiculous
inflation
deflation
12
A persistent rise in the price of goods and services over a period of time
recession
interest
deflation
inflation
13
The letter that represents the duration of time over which interest is calculated
n
r
t
P
14
Wealth building is a ________________, not a sprint.
way of life
competition
marathon
life skill
15
Where should your emergency fund be kept?
In your savings account
Hidden under your mattress
Separate account
In your wallet
16
What is the key ingredient when it comes to wealth building?
Behavior
Friends
Discipline
Saving
17
Saving money over time for a large purchase
sinking fund
emergency fund
profit
credit
18
An investment that generates interest provided you leave it until it reaches a maturity date
CD
mutual funds
checking account
savings
19
The amount a high school student should have in an emergency fund
$500
$200
$1,000
High school students don't need an emergency fund
20
Ben and Arthur discovered
rate of return on your investment matters
the length of time money is invested matters
both rate of return and the length of the investment matters
they both have the best brother
21
What is the law that states, "If it can go wrong, it will go wrong"?
Fisher's Law
Murphy's Law
Dave Ramsey's Law
Roger's Law
22
The knowledge and skillset necessary to be an informed consumer and manage finances effectively
behavior
planning
goals
financial literacy
23
The letter that represents the number of times interest is compounded
n
P
t
r
24
T or F Your ability to save is based on your earnings.
False
True
25
Why should interest earned NOT be a factor with your emergency fund?
An emergency fund is not intended to grow
Interest bearing accounts at banks earn high interest rates
None of the above
Inflation can eat up interest
26
Money set aside for a 'rainy day' is called
an emergency fund
fun money
an interest-bearing account
a savings account
27
The letter that represents the principal portion of the interest formulas
t
P
r
n
28
Using the Rule of 72, how long would it take for your money to double if you invest it at 9%?
You can't find an interest rate that pays that much
8 months
7.2 years
8 years
29
The interest paid on interest previously earned
building interest
interest-bearing account
simple interest
compound interest
30
Why don't people save money?
They do not live on a budget
They lack discipline
All of the above
They lack focus
