Financial Literacy Quiz-See How You Do
Every year we hear about polls, quizzes, and surveys of youth and adults about their financial literacy. For instance, the S&P Global Financial Literacy Survey found that only 57% of Americans are financially literate. That puts the U.S. as 14th on the global list. Norway, Denmark, and Sweden top the charts at 71% national financial literacy each, while the U.K. came in 6th at 67%.
But what about you? How well do you understand financial literacy? Let’s take a quiz to find out:
The Money Professors’ Financial Literacy Quiz
1If a movie ticket costs $10 today, then about how much will a movie ticket cost in 10 years, assuming the price increases at an inflation rate of 3% per year?
- About $13
- A bit less than $13
- A bit more than $13
- At least $26
2If you had invested money in the U.S. stock market over any 30 year period, about what rate of return would you have received?
- A 2% loss
- A 2% gain
- A 6% gain
- A 9% gain
- A 16% gain
3If your retirement plan at work offers a 50% match on your contributions and you invest $100 per month, how much money would your employer add to the account in one year?
4Your credit card charges 16% interest rate and requires a minimum payment of 4% of the balance (but at least $10) each month. If you never make another purchase on your card, and you owe $10,000, about how long will it take to pay off the credit card?
- About 2 years
- About 5 years
- About 7 years
- About 14 years
- About 21 years
5You are in the 25% marginal tax bracket and have the option of taking a $2,000 tax credit or a $2,000 tax deduction, but not both. Which do you choose?
- The $2,000 tax credit
- The $2,000 tax deduction
- It doesn’t matter either way since you will save the same amount in taxes
6The availability of money that is not yet earned is called:
7When you use your debit card to make a purchase, but hit the ‘Credit’ key at checkout:
- It will help your credit score improve
- It will hurt your credit score
- It will not affect your credit score
- It will delay the amount of time it takes for the money to come out of your account
- You cannot hit the ‘Credit’ key if you use a debit card
8A $205,000 mortgage at 5% for 30 years has a monthly payment (principal and interest only) of $1,100. About how much will you pay each month for a 15-year mortgage if the interest rate is the same?
9When you lease a car, you are essentially:
- Buying a new car
- Investing in a new car
- Renting a car
- Buying a used car
- Saving money when compared to buying a new (similar) car every 10 years
- Each car loan you apply for in a short period of time will lower your score
- Each car loan you apply for in a short period of time will raise your credit score
- All of the car loan applications will be treated as a single inquiry on your report and will lower your score a small amount
- Applying for a loan does not affect our score, unless you decide to actually take out the loan
- Your credit score is not affected by applying for the loan, but will only be affected if you miss payments (negative) or make the payments (positive)
So how do you think you did? Click here for the answers.
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