Chapter 2

If risk is low, then the interest rate that your money earns is generally:
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If risk is low, then the interest rate that your money earns is generally:
low.
Which of the following refers to investment gains earned in the first time period that are put to work in the second time period to earn additional investment returns?
Compound growth.
Which of the following provides an estimate of how long it will take you to double your money?
Rule of 72.
The Federal Deposit Insurance Corporation and the National Credit Union Administration protect savings deposits up to what amount?
$250,000.
How long will it take for your money to double if the annual percentage yield (APY) is 1.50%?
48 Years.
Which of the following can affect the loan interest rate?
All of these answer choices are correct.
Which of the following refers to the amount of money borrowed?
Principal.
What should you compare when comparing savings options?
APY
Which of the following estimates how much current savings and investments will be worth at a certain date in the future?
FV of a lump sum.
Approximately, how many years would it take your money to grow from $5500 to $11000 if you could earn 7.20% interest?
10.
Approximately, what interest rate would you need to earn in order to turn $2700 into $5400 over 8.00 years?9%.What formulas and calculations are some of the most valuable external finance tools that allow you to consider financial goals in terms of money, time, and interest?Time value of money (TVM)If you start with $1700 today, how much will you have in 2 years if you can earn 6% each year?$1910Which of the following determines the current value of a future amount?PV of a lump sum.Approximately, how much years would it take your money to grow from $3500 to $7000 if you could earn 7.20% interest?10.Approximately, what interest rate would you need to earn in order to turn $1300 into $2600 over 6.25 years?12%Which of the following refers to borrowing money to buy something that either depreciates quickly in value or is consumed immediately?Bad debt.Which of the following is an asset that would depreciate in value over time?All of these answer choices are correct.Which of the following refers to an asset that increases in fair market value over time?Appreciating asset.Which of the following refers to the difference between the value of an asset and any liability (debt) associated with asset?Equity.Which of the following refers to how quickly an asset can be converted to cash?Liquidity.Which of the following is an asset that would appreciate in value over time?House.Which of the following is on the right side of the balance sheet?Liabilities and net worth.Which of the following is an element in a budget?All of these answer choices are correct.Which of the following refers to a financial tool that helps you regulate how quickly, and in what ways, you money is being used so that you can stay focused on accomplishing your goals?Budget.Which of the following is the first step of resource management?Set and know your financial goals.Which ratio indicates what percentage of your income that you are using to pay all of your debts?Total debt-to-income ratio.Which of the following does a budget include?Income and expenses.Which of the following means that your expenses exceed your income?Deficit.Which of the following can be used for tracking?All of these answer choices are correct.