Financial Literacy Quiz December 26, 2015 Finances Take The Financial Literacy Quiz! Happy Friday! Earlier in the week, I told you all I would give you a financial literacy quiz. No one can see your results except you. Well, here it is. Have fun, good luck and have a great weekend! Please take the quiz below: How much of your monthly income should you spend on monthly housing expenses?A) 50% B) 43% C) 31% If you want to improve your credit score, which step is the best to take?A) Close old credit card accounts you no longer use. B) Pay down your debt to at least 25 percent or less of each credit card limit. C) Consolidate your debt on one balance-transfer credit card. How big should your emergency savings be?A) $1,000 B) Two months of rent or mortgage payments C) Six months of living expenses Who needs life insurance the most?A) A single mother with two young children B) A two-income married couple without children C) An elderly widow Which of the following individuals will pay the most in interest on their credit card over time?A) Jane, who makes the minimum payment on her credit card bill every month. B) Joe, who pays the balance on his credit card in full every month. C) Joyce, who sometimes pays the minimum, sometimes pays less than the minimum, and missed one payment on her credit card bill. Which of these accounts allows you to make unlimited withdrawals without a fee?A) Certificate of deposit. B) Checking account. C) Money market account. Which of these retirement savings plans will result in the largest sum by the time the individual is 65?A) Tom saves $1,000 per year from age 25 to 35 in an account earning 8 percent interest and then stops saving. B) Tracy saves $1,000 per year from age 35 to 65 in an account earning 8 percent interest. C) Both the same Matt and Eric are young men. Each has a good credit history. They work at the same company and make approximately the same salary. Matt has borrowed $6,000 to take a foreign vacation. Eric has borrowed $6,000 to buy a car. Who is likely to pay the lowest finance charge?A) Matt will pay less because people who travel overseas are better risks. B) They will both pay the same because they have almost identical financial backgrounds. C) Eric will pay less because the car is collateral for the loan. Doug must borrow $12,000 to complete his college education. Which of the following would NOT be likely to reduce the finance charge rate?A) If his parents took out an additional mortgage on their house for the loan. B) If the loan was insured by the Federal Government. C) If he went to a state college rather than a private college. If you had a savings account at a bank, which of the following would be correct concerning the interest that you would earn on this account?A) Sales tax may be charged on the interest that you earn. B) You cannot earn interest until you pass your 18th birthday. C) Income tax may be charged on the interest if your income is high enough.