FINANCIAL LITERACY ASSESSMENT
AND ANSWERS.
1. Renting provides _________ flexibility but can lead to _________ costs in the long-‐
term. - Answers-greater; higher
2. ______ What is the purpose of having a personal budget? - Answers-To help show
you how your income and spending compare each month. To help you improve your
financial outlook. To show you where your money goes each month.
3. _____ The sales tax in Jefferson county is 9%. Johannes purchased a new pair of
shoes at a retail price of $30.00. How much sales tax did he have to pay? - Answers-
$2.70.
4. What's the purpose of balancing or monitoring your checking account? - Answers-To
help you calculate how much money you have in your account
5. The best way to ensure the accuracy and safety of your accounts is to: - Answers-
Monitor your online accounts regularly
6. When it comes to investing, what is the typical relationship between risk and return? -
Answers-The greater the potential risk, the greater the potential return.
7. Interest is: - Answers-a percent that you will pay back on a sum of money you borrow
from a lender.
8. What is Compound Interest? - Answers-When you gain interest on original balance
plus the interest already gained.
9. To earn as much interest as possible, you should open a savings account that earns
_______ interest and has the ______ interest rate. - Answers-compound; highest
10. List some different types of savings account? - Answers-Certificate of Deposit &
Money Market Account
11. John just opened a savings account and wants to maximize the amount of interest
he earns. What actions would enable him to earn MORE interest? - Answers-Selecting
an account with a high interest rate, Leaving his money in the account for long period of
time.
12. You are opening a savings account that earns compound interest. Which
compounding frequency will earn you the MOST money? - Answers-Compounding daily
, 13.List some things you know to be true about savings accounts? - Answers-People
should evaluate different forms of savings accounts based on their needs
14. When you buy a ___________ you are loaning money to an organization. -
Answers-Bond
15. Diversification is important in investing because... - Answers-It helps you to balance
your risk across different types of investments
16. Which financial institution is a privately owned, cooperative bank in which the
primary purpose is to provide credit at a low rate to its members? - Answers-Credit
Union
17. Joselyn has a checking account balance of $100.00 She uses her debit card to
purchase a new handbag for $125.00. Because she does not have enough money in
her account to cover the purchase, the bank charges her a fee. What fee does the bank
charge? - Answers-Overdraft Fee
18. The numbers in the bottom left side of a check are your bank account number and
______________________________? - Answers-The banks routing number
19. What part of a check is the LEAST important? - Answers-Memo line
20. Savings accounts usually offer _________ interest rates than checking accounts. It
is _________ to access your money in a savings account than in a checking account. -
Answers-higher; harder
21.What are some unique feature about a credit unions? - Answers-Credit unions are
typically owned and run by their members. Credit unions limit membership to certain
people or groups.
22. Which type of account is typically the MOST liquid and why? - Answers-Checking
account
23. List some typical account fees? - Answers-ATM fee, Service fee, Minimum balance
fee, Late Fee, Overdraft Fee
24. What's the best strategy for avoiding ATM fees? - Answers-Only use ATMs in your
bank's network
25. A financial institution that handles money, including keeping it for saving or
commercial purposes. - Answers-Bank
26. A charged if your balance exceeds your credit limit on your credit card. - Answers-
Over Credit Limit
AND ANSWERS.
1. Renting provides _________ flexibility but can lead to _________ costs in the long-‐
term. - Answers-greater; higher
2. ______ What is the purpose of having a personal budget? - Answers-To help show
you how your income and spending compare each month. To help you improve your
financial outlook. To show you where your money goes each month.
3. _____ The sales tax in Jefferson county is 9%. Johannes purchased a new pair of
shoes at a retail price of $30.00. How much sales tax did he have to pay? - Answers-
$2.70.
4. What's the purpose of balancing or monitoring your checking account? - Answers-To
help you calculate how much money you have in your account
5. The best way to ensure the accuracy and safety of your accounts is to: - Answers-
Monitor your online accounts regularly
6. When it comes to investing, what is the typical relationship between risk and return? -
Answers-The greater the potential risk, the greater the potential return.
7. Interest is: - Answers-a percent that you will pay back on a sum of money you borrow
from a lender.
8. What is Compound Interest? - Answers-When you gain interest on original balance
plus the interest already gained.
9. To earn as much interest as possible, you should open a savings account that earns
_______ interest and has the ______ interest rate. - Answers-compound; highest
10. List some different types of savings account? - Answers-Certificate of Deposit &
Money Market Account
11. John just opened a savings account and wants to maximize the amount of interest
he earns. What actions would enable him to earn MORE interest? - Answers-Selecting
an account with a high interest rate, Leaving his money in the account for long period of
time.
12. You are opening a savings account that earns compound interest. Which
compounding frequency will earn you the MOST money? - Answers-Compounding daily
, 13.List some things you know to be true about savings accounts? - Answers-People
should evaluate different forms of savings accounts based on their needs
14. When you buy a ___________ you are loaning money to an organization. -
Answers-Bond
15. Diversification is important in investing because... - Answers-It helps you to balance
your risk across different types of investments
16. Which financial institution is a privately owned, cooperative bank in which the
primary purpose is to provide credit at a low rate to its members? - Answers-Credit
Union
17. Joselyn has a checking account balance of $100.00 She uses her debit card to
purchase a new handbag for $125.00. Because she does not have enough money in
her account to cover the purchase, the bank charges her a fee. What fee does the bank
charge? - Answers-Overdraft Fee
18. The numbers in the bottom left side of a check are your bank account number and
______________________________? - Answers-The banks routing number
19. What part of a check is the LEAST important? - Answers-Memo line
20. Savings accounts usually offer _________ interest rates than checking accounts. It
is _________ to access your money in a savings account than in a checking account. -
Answers-higher; harder
21.What are some unique feature about a credit unions? - Answers-Credit unions are
typically owned and run by their members. Credit unions limit membership to certain
people or groups.
22. Which type of account is typically the MOST liquid and why? - Answers-Checking
account
23. List some typical account fees? - Answers-ATM fee, Service fee, Minimum balance
fee, Late Fee, Overdraft Fee
24. What's the best strategy for avoiding ATM fees? - Answers-Only use ATMs in your
bank's network
25. A financial institution that handles money, including keeping it for saving or
commercial purposes. - Answers-Bank
26. A charged if your balance exceeds your credit limit on your credit card. - Answers-
Over Credit Limit
