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Personal Finance NGPF final exam review pt 2 Flashcards | StudBud
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Personal Finance NGPF final exam review pt 2
Personal Finance NGPF final exam review pt 2
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1
What is an effective strategy for personal saving?
Save a certain percentage each paycheck
Cover all needs and wants and save whatever is left over
Take out a payday loan so you can save before getting your paycheck
Wait until end of month and save whatever you have left in checking account
2
What is an advantage of paying your bills online?
Saves time and paper
Company you pay receives money same day
There is a small fee to set-up and use this feature
Eliminates late fees
3
What will not help you build your credit history?
auto loan
secured credit card
credit card
debit card
4
Where does the money come from when you use your debit card?
Credit card company gives a cash advance to cover the cost
Deducted from credit card account
Credit card company covers the cost
Deducted from checking account
5
You have overdraft protection. What happens if you overdraft on your account?
Account will be closed
Will be charged a fee for each transaction you go over
Bank will not allow you to overdraft your account so card will be denied
Bank will give you 5 days to add funds to your account to cover overdrafts
6
The 50-20-30 rules states you should spend _____ on needs, _______ on savings, _______ on wants.
20,50,30
30,20,50
30,50,20
50,20,30
7
How does investing in the stock market differ from putting money in a savings account at a bank?
Investing helps to accumulate for retirement while saving is best form stg
Investing is best for short-term situations; savings is for long term
Investing is always a less risky option than saving
Investing typically earns 1-2% while saving earns between 5-7%
8
Which credit payback strategy would lead to the HIGHEST interest charges?
paying your credit card bill in full every month
making the minimum payment every month on time
making the minimum payment every month with an occasional late payment
paying 20% of credit card balance every month on time
9
Who does not have to file a tax return?
Someone who owns a business and has an income of $7,000
Someone who earns $28,200 but paid in cash
Someone who earned $12,000 in wages and $250 in tips
Someone with total income of $9,500 from three jobs
10
When borrowing money it is better to have a _______ interest rate.
higher
lower
11
The credit card act of 2009 requires consumers under 21 to either have an adult cosigner or ________.
have proof of personal income sufficient to make the payments
have cash savings equal to the credit card limit
attending college half-time
be a recent college graduate
12
You receive a call with an automated voice saying that your credit card has been used fraudulently. What do you do?
Follow instructions immediately
Push 0 to speak to representative
Hang up and call her credit card company with number on back of card
Enter in 16 digit card number, but don't enter in your PIN or 3-digit code
13
How can you access the money from your checking account?
Use debit card to pay for groceries at POS terminal
Taking cash out with credit card at an ATM
Receive P2P payment from a friend
Deposit paycheck at an ATM
14
You live in an area where homes cost $550,000. You can afford a $300,000 mortgage. What down payment will you need?
$300,000
$0
$200,000
$250,000
15
Which is true about a lease agreement?
You don't have to pay fees if you have a lease
It's between you and your roommates
It includes details about rent, policies and vacating
It has information about your prior housing experience
16
Which is a way NOT to file your taxes?
using professional tax preparers
using tax software
using your stockbroker
filing a paper copy
17
Which form determines how much money is withheld from your paycheck for federal and state income taxes?
1040
W-2
I-9
W-4
18
Why is it a good idea to pay more than your monthly loan amount?
Every time you pay extra, the lender reduces the interest rate
Extra payment is applied to the interest, which reduces overall cost
The extra payment is applied to the principal, which pays down debt quicker
Amortized loans have higher interest rates, so it's best place for extras.
19
What is one question an investor should ask before investing in a Roth IRA or Traditional IRA?
do I want to pay taxes now (Roth) or later (traditional)?
do I want to make a guaranteed return of 6% or 8%?
what type of investments do I want to make?
do I want to pay taxes now (traditional) or later (Roth)?
20
A _______ credit score indicates good credit and will lead to a ________ interest rate on a loan.
lower, higher
higher, lower
higher, higher
lower, lower
21
You are considering buying a $30,000 car. Which financing options will likely lead to the LOWEST payment?
$0 down payment, 6% interest, 60 months
$3000 down payment, 6% interest, 60 months
$0 down payment, 0% interest, 36 months
$3000 down payment, 6% interest, 84 months
22
Experts recommend that you accumulate enough to cover 3-6 __________ of expenses in your emergency fund.
months
days
weeks
years
23
This form is used to prove that you are eligible to work in the U.S.
I-9
W-4
1040
1099
