AnswersOCPS -2102371-Personal Finance and Money ManagementUnit Test

Unit Test — Unit test Answers

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1
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In the formula I=P·r·t, what does r stand for?

A
Rate: the percent that interest is paid annually as a decimal
B
Ratio: the size of the interest interval compared to time
C
Return: how much money you end up earning
D
Reserves: how much money you have in the investment
2
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Approximately how much principal would need to be placed into an account earning 3.575% interest compounded quarterly so that it has an accumulated value of $68,000 at the end of 30 years?

A
$23,706
B
$23,377
C
$52,069
D
$58,944
3

Mary and Lewis each open a savings account at the same time. Mary invests $3,700 in an account yielding 3.2% simple interest, and Lewis invests $3,000 in an account yielding 5.9% simple interest. After fifteen years, who has the greater total amount of money, and how much greater is it?

A
Lewis has $879 more than Mary.
B
Lewis has $179 more than Mary.
C
Mary has $776 more than Lewis.
D
Mary has $345 more than Lewis.
4

The same amount of principal is invested in different accounts earning the same interest rate. Which of the following accounts would have the greatest accumulated value at the end of one year?

A
An account earning no interest
B
An account earning simple interest
C
An account earning interest compounded annually
D
An account earning interest compounded daily
5

Which is an accurate description of digital currency?

A
A currency that uses online networks and offers privacy.
B
A government-controlled online currency like electronic cash.
C
A bank-approved electronic version of paper money for certain banking apps.
D
A type of money used everywhere without needing internet access.
6

How do banking transaction regulations differ from credit card regulations?

A
Banking transactions have to prevent fraud.
B
The Fair Credit Reporting Act applies to credit cards.
C
Credit cards are watched for money laundering.
D
Banking regulations cover more financial activities.
7

A principal of $5,350 is placed in an account that earns 3.5% interest. If the interest is compounded annually, how much money will be in the account at the end of 4 years?

A
$5,760.06
B
$5,537.25
C
$6,099.00
D
$6,139.25
8

Why is simple interest useful for planning parts of your financial future?

A
Simple interest can endure unforeseen economic changes by fluctuating.
B
Simple interest generates more money than any other source of income.
C
Simple interest grows more quickly if you invest in it longer.
D
Simple interest is very regular and can be calculated in advance.
9

How do Peer-to-Peer (P2P) payment systems compare to digital wallets in terms of storing payment information?

A
P2P systems store loyalty card details, but digital wallets do not.
B
Digital wallets store many types of payment info, but P2P systems do not.
C
Digital wallets and P2P systems cannot store credit or debit card numbers.
D
P2P systems need payment info updates often, while digital wallets may not.
10

How are the regulations for Electronic Fund Transfers (EFTs) different from those for Peer-to-Peer (P2P) payments?

A
P2P payments, but not EFTs, are controlled by the Fair Credit Reporting Act.
B
P2P services can't keep credit card details, unlike EFTs.
C
Both EFTs and P2P payments are covered by the Electronic Fund Transfer Act.
D
All EFTs and P2P payments are regulated by credit card rules.
11

In a free enterprise system, what are the goals of government? Check all that apply.to ensure safety for its citizensto ensure that citizens' needs are metto stay out of all economic decisionsto solve the problem of povertyto prevent citizens from getting richto ensure that the market is fair

A
to ensure safety for its citizens
B
to ensure that citizens' needs are met
C
to stay out of all economic decisions
D
to solve the problem of poverty
E
to prevent citizens from getting rich
F
to ensure that the market is fair
12

A responsibility the Federal Reserve has is to

A
loan money to banks during a crisis.
B
loan money to corporations for capital.
C
provide banking services to consumers.
D
provide financial services to corporations.
13

Karen has $800 to open a checking account. She wants an account with the lowest fees. She only writes about five checks per month and her employer has direct deposit. She does not plan on using the ATM or online banking. Bank Account Terms and ConditionsWhich checking account would be best for Karen?

Question illustration
A
Account A
B
Account B
C
Account C
D
Account D
14

Read the graph that displays mortgage interest rates between 1978 and 1983.In what year did consumers get the best deal on a mortgage?

Question illustration
A
1978
B
1980
C
1982
D
1983
15

Building equity in a home is a good thing because

A
mortgage payments decrease as equity increases.
B
credit scores increase as equity increases.
C
equity in a home increases the homeowner’s net worth.
D
property taxes decrease as equity increases.
16

What is a primary benefit of online bill payments compared to traditional methods?

A
You get your money right away.
B
You can send a check by mail just in case.
C
It takes a few days for the money to go through.
D
You can stick to the bank's hours for paying.
17

Which best defines digital currency?

A
Digitized images of physical bills and coins.
B
Money exclusively used for video games and virtual worlds.
C
Money online that uses cryptography and blockchain technology.
D
An online payment system with instant bank transfers.
18

In the formula I=P·r·t, what does P stand for?

A
Percent: the interest rate expressed as a percentage
B
Principal: the amount of money you initially invested
C
Period: how often the interest is calculated
D
Payout: how much money you end up with
19

How do illegal activities impact digital currencies?

A
They have no impact because digital currencies cannot be used illegally.
B
They can lead to more government rules and legal problems.
C
Illegal uses of digital currencies are automatically stopped by the blockchain.
D
Illegal activities show that digital transactions need better security.
20

An organization whose members have a common cause for which they seek to influence public policy is called an .

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