NAF Exam Study Guide| questions with 100 % correct answers | verified

Financial Literacy - Being Financial Literate is when your able to manage your money well, plan for the future and make reasonable decisions. Needs - Things you can't live without Wants - Things you would like to have Time value of Money - 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 - It is a payment made in exchange for using money over time. Interest part 2 - If you borrow money from the bank, you pay the bank interest. If you lend the bank money, it pays you interest. Future Value - It refers to the value an investment at some point in the future. Simple interest - 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 - Refers to the interest that you earn on your money. The processor compounding refers to earning interest on your interest. (exponential) Financial Service - The 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 - Hold an protect people's money, lend money people, help people make more money, protect people from being financially hurt by unfortunate event.