NAF Exam Study Guide questions and 100% correct answers

Financial Literacy - correct answer Being Financial Literate is when your able to manage your money well, plan for the future and make reasonable decisions. Needs - correct answer Things you can't live without Wants - correct answer Things you would like to have Time value of Money - correct 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 - correct answer It is a payment made in exchange for using money over time. Interest part 2 - correct 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 - correct answer It refers to the value an investment at some point in the future. Simple interest - correct 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 - correct answer Refers to the interest that you earn on your money. The processor compounding refers to earning interest on your interest. (exponential) Financial Service - correct answer 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.