If You (or Your Students) Can Answer All Five of These Questions Correctly...

Jul 19, 2016
Stocks, Question of the Day, Research, Personal Finance, Investing, Savings, Financial Literacy, Quizzes, Compound Interest, Interactive


…than they have more financial knowledge than 86% of the US population (according to recent National Financial Capability Study):

  1. Suppose you have $100 in a savings account earning 2 percent interest a year. After five years, how much would you have? [More than $102, Less than $102, Exactly $102]; 75% got correct answer

  2. Imagine that the interest rate on your savings account is 1 percent a year and inflation is 2 percent a year. After one year, would the money in the account buy more than it does today, exactly the same or less than today? [Buy more, Buy the same, Buy less than today]; 59% got correct answer

  3. If interest rates rise, what will typically happen to bond prices? Rise, fall, stay the same, or is there no relationship? [Rise, Fall, Stay the same, No relationship]; 28% got correct answer

  4. True or false: A 15-year mortgage typically requires higher monthly payments than a 30-year mortgage but the total interest over the life of the loan will be less. 75% got correct answer.

  5. True or false: Buying a single company’s stock usually provides a safer return than a stock mutual fund. 46% got correct answer.

  6. BONUS QUESTION: Suppose you owe $1,000 on a loan and the interest rate you are charged is 20% per year compounded annually. If you didn’t pay anything off, at this interest rate, how many years would it take for the amount you owe to double? [Less than 2 Years, 2-4 Years, 5-9 Years, 10 or More]; 33% got correct answer


Looking for more questions, be sure to check out the NGPF Assessments!


About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.