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NAF EXAM STUDY GUIDE QUESTIONS AND ANSWERS WITH
COMPLETE SOLUTIONS
Financial Literacy - ANSWER Being Financial Literate is
when your able to manage your money well, plan for the
future and make reasonable decisions.
Needs - ANSWER Things you can't live without
Wants - ANSWER Things you would like to have
Time value of Money - ANSWER It 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 - ANSWER It is a payment made in exchange for
using money over time.
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Interest part 2 - ANSWER If you borrow money from the
bank, you pay the bank interest. If you lend the bank
money, it pays you interest.
Future Value - ANSWER It refers to the value an
investment at some point in the future.
Simple interest - ANSWER Simple 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 - ANSWER Refers to the interest that
you earn on your money. The processor compounding
refers to earning interest on your interest. (exponential)
Financial Service - ANSWER The financial services
industry helps people, businesses, and governments
manage their money. They are heavily regulated by the
NAF EXAM STUDY GUIDE QUESTIONS AND ANSWERS WITH
COMPLETE SOLUTIONS
Financial Literacy - ANSWER Being Financial Literate is
when your able to manage your money well, plan for the
future and make reasonable decisions.
Needs - ANSWER Things you can't live without
Wants - ANSWER Things you would like to have
Time value of Money - ANSWER It 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 - ANSWER It is a payment made in exchange for
using money over time.
, 2|Page
Interest part 2 - ANSWER If you borrow money from the
bank, you pay the bank interest. If you lend the bank
money, it pays you interest.
Future Value - ANSWER It refers to the value an
investment at some point in the future.
Simple interest - ANSWER Simple 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 - ANSWER Refers to the interest that
you earn on your money. The processor compounding
refers to earning interest on your interest. (exponential)
Financial Service - ANSWER The financial services
industry helps people, businesses, and governments
manage their money. They are heavily regulated by the
