DAVE RAMSEY PRE-TEST / POST-TEST WITH CORRECT ANSWERS 2023.

DAVE RAMSEY PRE-TEST / POST-TEST WITH CORRECT ANSWERS 2023. Compound Interest - CORRECT ANSWER-Interest paid on interest previously earned Emergency Fund - CORRECT ANSWER-Five hundred dollars in readily available cash to be used only in the event of an emergency. Interest rate - CORRECT ANSWER-Percentage paid to a lender for the used of borrowed money or percentage earned on invested money. Sinking Fund - CORRECT ANSWER-Saving money over time for a large purchase. Inflation - CORRECT ANSWER-The persistant rise in the price of goods and services over a period of time. Interest- Bearing Account - CORRECT ANSWER-An account that generates interest income on the available balance in the account. 1st Foundation - CORRECT ANSWER-Save $500 2nd Foundation - CORRECT ANSWER-Get out of debt, and stay out of debt 3rd Foundation - CORRECT ANSWER-Pay cash for a car (sinking fund) 4th foundation - CORRECT ANSWER-Pay cash for college 5th foundation - CORRECT ANSWER-Build wealth and give Negative Savings Rate - CORRECT ANSWER-Spending more money than you make and going into debt 2 components to saving - CORRECT ANSWER-Time and rate of return Time value of money - CORRECT ANSWER-the idea that $100 today will not buy the same amount as in the future due to inflation and interest. 3 reasons to save - CORRECT ANSWER-purchases, emergency fund, wealth building Keys to saving - CORRECT ANSWER-focus, making it priority and habit, discipline People who don't save money - CORRECT ANSWER-often lack focus and discipline, and have no budget Why should emergency fund and spending money be kept separate - CORRECT ANSWER-To make sure its only spent for emergencies and not as easy to access and spend it. What is the purpose of fully funded emergency fund - CORRECT ANSWER-To have money for unexpected financial emergencies Saving should bring - CORRECT ANSWER-contentment Emergency Fund interest - CORRECT ANSWER-Is not important because an emergency fund is not used to growth wealth Savings habits - CORRECT ANSWER-should not be based on income should be determined in the budget Americans savings rates - CORRECT ANSWER-are usually not high Emergency fund after school - CORRECT ANSWER-should be 3-6 months of expenses Investing - CORRECT ANSWER-should start now Essential elements of wealth building - CORRECT ANSWER-discipline, time, compound interest Why do you need an emergency fund - CORRECT ANSWER-Emergencies can happen at any age. Why in emergency fund the 1st foundation? - CORRECT ANSWER-An emergency fund allows you to have money available for any surprise expenses and can help you avoid debt Calculate compound interest: $1000 at 6% for 3 years - CORRECT ANSWER