NAF Exam Study Guide With Updated Solutions.

NAF Exam Study Guide With Updated Solutions. Financial Literacy - answerBeing Financial Literate is when your able to manage your money well, plan for the future and make reasonable decisions. Needs - answerThings you can't live without Wants - answerThings you would like to have Time value of Money - answerIt refers to the idea that a dollar in hand today is worth more than a dollar in the future. In other words, money avaliable now is worth more than the same amount in the future. Interest - answerIt is a payment made in exchange for using money over time. Interest part 2 - answerIf you borrow money from the bank, you pay the bank interest. If you lend the bank money, it pays you interest. Future Value - answerIt refers to the value an investment at some point in the future. Simple interest - answerSimple interest refer to the interest that you earn on your money. Simple interest is paid when the interest is not reinvested each interest period. (linear) Compound interest - answerRefers to the interest that you earn on your money. The processor compounding refers to earning interest on your interest. (exponential) Financial Service - answerThe financial services industry helps people, businesses, and governments manage their money. They are heavily regulated by the government and they keep money flowing through the economy. Financial service institutions may - answerHold an protect people's money, lend money people, help people make more money, protect people from being financially hurt by unfortunate event. Examples of financial service institutions are, - answerBanks, credit unions, saving and loans associations, insurance companies Savings account - answerIt is a place to keep your money. Checking account - answerAllows you to write checks against the money in the account.