Take the FINANCIAL LITERACY QUIZ! HOW MUCH DO YOU KNOW about Finances?

Take the FINANCIAL LITERACY QUIZ! HOW MUCH DO YOU KNOW about Finances?

1. Interest Rate:
Suppose you had $100 in a savings account and the interest rate was 2% per year. After 5 years, how much do you think you would have in the account if you left the money to grow?

• More than $110
• Exactly $110
• Less than $110

2. Inflation:
Imagine that the interest rate on your savings account was 1% per year and inflation was 2% per year. After 1 year, how much would you be able to buy with the money in this account?

• More than today
• Exactly the same
• Less than today

3. Risk:
Is this statement True or False? Buying a single company’s stock usually provides a safer return than a stock mutual fund.

• True
• False

4. Tax Offset:
Assume you were in the 25 percent tax bracket (you pay $0.25 in tax for each dollar earned) and you contributed $100 pretax to an employer’s 401(k) plan. Your take-home pay (what’s in your paycheck after all taxes and other payments are taken out) will then:

• Decline by $100
• Decline by $75
• Decline by $50
• Remain the same

5. Match:
Assume that an employer matched employee contributions dollar for dollar. If the employee contributed $100 to the 401(k) plan, his account balance in the plan including his contribution would:

• Increase by $50
• Increase by $100
• Increase by $200
• Remain the same

Answers:

• 1. More than $110
• 2. Less than today
• 3. False
• 4. Decline by $75
• 5. Increase by $200