Do You Deserve A High Grade In Financial Literacy?
To test the general public's financial literacy, the American Bankers Association (ABA) Foundation posed these five questions:
Q. What is considered a good credit score?
A. Credit scores can range from 300 to 850. Generally, anything over 700 is a good score. Your score factors in your payment history, types of credit, and outstanding debt.
Q. If you must borrow $200, would you rather pay back $205 or $200 plus 5% interest?
A. $205 is better because $200 plus 5% interest comes out to $210.
A. The savings would grow to $1,040.40 by the end of the second year because of compounding interest.
Q. If you're investing, is it safer to put your money into a single holding or multiple assets?
A. It's safer to put money into multiple assets. Through diversification, your risk of losing money decreases when money is spread across multiple investments (although there are no guarantees).
Q. Over the next 15 years, the cost of living and your income both double. Will you be able to buy more, the same or less than today?
A. The same. Inflation drives up costs, but buying power stays the same when inflation and income rise at the same rate.
How did you do on this quiz? You may need more guidance than you thought.
© 2018. All Rights Reserved.
- Bitcoin, Chasing Your Tail, And Investing
- The Big New Tax Break For Pre-Retired Professionals
- Sidestepping New Limits On Charitable Donations
- The Truth About U.S. GDP Growth
- Another Member Of Music Royalty Dies With No Will
- Paying Off A Mortgage And The New Tax Code
- Key Facts On Deducting Medical Expenses
- Reduce Your Widow's Tax Bill Materially Annually
- Ten Things About 10-Year U.S. Stock Market Performance
- Qualifying For The New Business Owner Tax Break
- Your Alma Mater Or Your Family?
- This Is Not Your Parents' Interest Rate Cycle
- If Family Is Wealth, Then Planning Is Immortality
- Life Is Fragile, So, Please, Value Each Day As Priceless
- Everything You've Learned About Interest Rates May Be Wrong