Category focus

Personal Financial Literacy

Back to bank

Compare loans and interest, plan savings, and evaluate everyday financial decisions.

Questions

Skill type

financial literacy

Study mode

Practice + review

Sample questions

Question

A student buys 3 notebooks for $4 each and 2 pens for $1.50 each. What is the total cost?

A.
$10.00
B.
$12.00
C.
$13.50
D.
$15.00

Question

Two customers took out loans from a bank. • Henry took out a 4-year loan for $5,000 and paid 4.2% annual simple interest. • Ingrid took out a 6-year loan for $5,000 and paid 3.9% annual simple interest. What is the difference between the amounts of interest Henry and Ingrid paid for their loans?

Open full-size question

Question

Helen had $330 in her savings account when Vince opened a savings account with zero dollars. • Helen deposited $30 into her account each week for x weeks. • Vince deposited $50 into his account each week for x weeks. • The accounts did not earn interest. Which inequality represents this situation when the amount of money in Helen’s account was greater than the amount of money in Vince’s account?

Open full-size question

Question

Gabriel deposits $2,500 into each of two savings accounts. • Account I earns 4% annual simple interest. • Account II earns 4% interest compounded annually. Gabriel does not make any additional deposits or withdrawals. What is the sum of the balances of Account I and Account II at the end of 3 years?

Open full-size question

Question

A customer will borrow $12,000 to buy a car. Which loan option would allow the customer to pay the least amount of interest?

Open full-size question

Question

A student’s parents invested $5,000 in a college savings account that pays 4.85% annual simple interest. No additional deposits or withdrawals will be made. Which amount is closest to the interest earned on the account at the end of 15 years?

Open full-size question

Question

Ben deposits $1,750 into each of two savings accounts. • Account I earns 2.75% annual simple interest. • Account II earns 2.75% interest compounded annually. Ben does not make any additional deposits or withdrawals. Which amount is closest to the difference between the interest Ben will earn in Account I and the interest Ben will earn in Account II at the end of 2 years?

Open full-size question

Question

A teacher opened an investment account at a bank. At the end of each year, the bank paid 6.4% annual simple interest on the money in the account. The table shows the activity in the account for three years. Investment Account Activity Beginning Amount Ending Year Balance for Deposited at New Interest Interest Balance for Year Beginning ofBalance Rate Earned Year Year 1 $0.00 $500.00 $500.00 6.4% $32.00 $532.00 2 $532.00 $500.00 $1,032.00 6.4% $66.05 $1,098.05 3 $1,098.05 $500.00 $1,598.05 6.4% $102.28 $1,700.33 Which statement explains why the balance in this account has grown?

Open full-size question

Question

$Monica wants to open a savings account with a deposit of $3,000. Monica will not make any additional deposits or withdrawals after she opens the account. Her bank offers two different savings accounts. • Account X pays 2.1% simple annual interest. • Account Y pays 2.4% interest compounded annually. Which statement about these accounts at the end of 5 years is true?$ Open full-size question

A.
$Answer A: Account X would earn Monica about $62.70 more interest than Account Y.$
B.
$Answer B: Account Y would earn Monica about $62.70 more interest than Account X.$
C.
$Answer C: Account X would earn Monica about $45.00 more interest than Account Y.$
D.
$Answer D: Account Y would earn Monica about $45.00 more interest than Account X.$

Question

$The table shows the cost per year of attending different types of colleges. Type of College Cost per Year (dollars) Public — 2 year (in state) 4,000 Public — 4 year (in state) 11,000 Public — 4 year (out of state) 28,000 Private — 4 year 38,000 A student is planning to attend college in 5 years. The student has saved $1,200 and plans to save another $50 per month over the next 60 months. Based on this information about the student’s plan, which statement about the possible choices for a college is true?$ Open full-size question

A.
$Answer A: The student would be able to afford the costs for one year at a private 4-year college.$
B.
$Answer B: The student would be able to afford out-of-state costs for half a year at a 4-year public college.$
C.
$Answer C: The student would be able to afford in-state costs for half a year at a public 4-year college.$
D.
$Answer D: The student would be able to afford in-state costs for one year at a public 2-year college.$

Question

A business owner invested $10,500 into an account that pays 1.2% annual simple interest. No additional deposits or withdrawals will be made.

Which amount is closest to the interest earned on the account at the end of 4 years?

Open full-size question

Question

Shakira has an investment account that she deposits $200.00 into each year. The table shows the amount of interest she earns in dollars and the ending balance each year.

Shakira’s Investment Account
Year Deposit (dollars) Interest Earned (2%) (dollars) Ending Balance (dollars)
1 200.00 4.00 204.00
2 200.00 8.08 412.08

Shakira continues to deposit $200.00 each year and earns the same interest rate for several years. Which statement about the ending balance each year is true?

Open full-size question

Question

A deposit of $1,200 is made into each of two bank accounts. No additional deposits or withdrawals will be made for 4 years.

Account I earns 1.5% annual simple interest.
Account II earns 1.5% interest compounded annually.

Which amount is closest to the difference between the balances of the two accounts at the end of 4 years?

Open full-size question

Question

A deposit of $7,912 is made into a new account that earns 5.75% simple interest. No additional deposits or withdrawals will be made for 2 years.

Which amount is closest to the balance in the account at the end of 2 years?

Open full-size question

Question

Jack plans to deposit $500 into a new bank account that earns 2% interest compounded annually. He will make no more deposits or withdrawals.

Over a period of 2 years, how much more will he earn in interest on this account than he would if he earned simple interest at a 2% annual rate?

Open full-size question

Question

Ms. Gleason deposited $4,800 in a new savings account at her bank.

The bank pays 0.6% interest compounded annually.
Ms. Gleason makes no additional deposits or withdrawals.

What will the balance in Ms. Gleason’s account be at the end of 6 years?

Open full-size question

Question

An investment account earns 3.2% interest compounded annually. The table shows the deposits made to the account, the interest earned on the account, and the ending balance of the account for each year as the balance grows over time.

Investment Account
Year Deposit
(dollars) Interest Earned
(dollars) Ending Balance
(dollars)
1 600.00 19.20 619.20
2 600.00 39.01 1,258.21
3 600.00 59.46 1,917.67
4 600.00 80.57 2,598.24
5 600.00 102.34 3,300.58

Which statement best explains why the balance of the investment account will continue to increase over time?

Open full-size question

Question

A student buys 3 notebooks for $4 each and 2 pens for $1.50 each. What is the total cost?

A.
$10.00
B.
$12.00
C.
$13.50
D.
$15.00

Question

$An employee put $5,000.00 in a retirement account that offers 9% interest compounded annually. The employee makes no additional deposits or withdrawals. Which amount is closest to the interest the employee will have earned at the end of 5 years?$ Open full-size question

A.
$Answer A: $229.09$
B.
$Answer B: $450.00$
C.
$Answer C: $2,250.00$
D.
$Answer D: $2,693.12$

Question

$An investor puts $2,500 into a life insurance policy that pays 8.5% simple annual interest. If no additional investment is made into the policy, how much accumulated interest should the investor expect at the end of 10 years?$ Open full-size question

A.
$Answer A: $21,250.00$
B.
$Answer B: $2,125.00$
C.
$Answer C: $212.50$
D.
$Answer D: $21.25$