Alabama Financial literacy test
correctly answered to pass
The total one gets to "take home" from a paycheck after taxes and deductions are taken out is
known as what? - ANS ✔✔Net pay
Which of the following is the form employers use to determine how much tax do deduct from a
paycheck - ANS ✔✔w-4
Which of the following is the form an employer provides to an employee to inform them of how
much money was deducted from paychecks in a given year? - ANS ✔✔w-2
Which of the following statements best describes gross pay? - ANS ✔✔Amount of money one
recieves from their job before taxes or other deductions are taken out.
Which of the following will be paid for as part of the escrow funds included in a mortgage loan?
- ANS ✔✔Property tax
When seeking to open a bank account, which of the following is needed? - ANS
✔✔Government - issued identification
When one is seeking to purchase a product at a store, what additional cost must be paid in
addition to the listed price of the product? - ANS ✔✔Sales tax
Which of the following best describes the concept of APR? - ANS ✔✔The credit card interset
rate, calculated on a yearly basis
, A certificate of deposite (CD) differs from a traditional savings account in what way? - ANS
✔✔CDs must remain untouched for a fixed period of time
All of the following are advantages of bundling Except what? - ANS ✔✔Increases insurance
options
Which of the followig investments is characterized by the following traits: Insured by FDIC or
NCUA, Lowest interest rate of all investments, Number of withdrawals per month may be
limited? - ANS ✔✔Traditional savings account
What is the term used to describe interest earned on interest gained? - ANS ✔✔Compound
interest
Which of the following is a financial institution that handles money, including keeping it safe for
saving or commercial purposes? - ANS ✔✔Bank
Using the simple interest formula, calculate the interest earned on $150 after one year at a 6%
return rate. - ANS ✔✔$9.00
When one recieves a product or service now, but pays for it later, it is known as what? - ANS
✔✔Credit
All the following are examples of installment loans EXCEPT: - ANS ✔✔credit card
Which of the following purchasing cards remove funds from one's checking account almost
instantly after one makes a purchase? - ANS ✔✔Debit card
When choosing between using a bank or a credit union, which of the following is an advantage
that credit unions generally have in compression to banks? - ANS ✔✔Owned by members, who
may vote and elect board of directs
correctly answered to pass
The total one gets to "take home" from a paycheck after taxes and deductions are taken out is
known as what? - ANS ✔✔Net pay
Which of the following is the form employers use to determine how much tax do deduct from a
paycheck - ANS ✔✔w-4
Which of the following is the form an employer provides to an employee to inform them of how
much money was deducted from paychecks in a given year? - ANS ✔✔w-2
Which of the following statements best describes gross pay? - ANS ✔✔Amount of money one
recieves from their job before taxes or other deductions are taken out.
Which of the following will be paid for as part of the escrow funds included in a mortgage loan?
- ANS ✔✔Property tax
When seeking to open a bank account, which of the following is needed? - ANS
✔✔Government - issued identification
When one is seeking to purchase a product at a store, what additional cost must be paid in
addition to the listed price of the product? - ANS ✔✔Sales tax
Which of the following best describes the concept of APR? - ANS ✔✔The credit card interset
rate, calculated on a yearly basis
, A certificate of deposite (CD) differs from a traditional savings account in what way? - ANS
✔✔CDs must remain untouched for a fixed period of time
All of the following are advantages of bundling Except what? - ANS ✔✔Increases insurance
options
Which of the followig investments is characterized by the following traits: Insured by FDIC or
NCUA, Lowest interest rate of all investments, Number of withdrawals per month may be
limited? - ANS ✔✔Traditional savings account
What is the term used to describe interest earned on interest gained? - ANS ✔✔Compound
interest
Which of the following is a financial institution that handles money, including keeping it safe for
saving or commercial purposes? - ANS ✔✔Bank
Using the simple interest formula, calculate the interest earned on $150 after one year at a 6%
return rate. - ANS ✔✔$9.00
When one recieves a product or service now, but pays for it later, it is known as what? - ANS
✔✔Credit
All the following are examples of installment loans EXCEPT: - ANS ✔✔credit card
Which of the following purchasing cards remove funds from one's checking account almost
instantly after one makes a purchase? - ANS ✔✔Debit card
When choosing between using a bank or a credit union, which of the following is an advantage
that credit unions generally have in compression to banks? - ANS ✔✔Owned by members, who
may vote and elect board of directs
