Financial Literacy Flashcard Deck

Question 1

What is compound interest?

Accepted Answer

Interest calculated on the initial principal and accumulated interest

Question 2

What is the compound interest formula?

Accepted Answer

A = P\left(1 + \frac{r}{n}\right)^{nt}

Question 3

What is APR?

Accepted Answer

Annual Percentage Rate - the yearly interest rate including fees

Question 4

What is the difference between a credit and debit card?

Accepted Answer

Credit borrows money, debit uses your own money from your account

Question 5

What is a mortgage?

Accepted Answer

A loan used to purchase real estate, secured by the property itself

Question 6

What is simple interest?

Accepted Answer

Interest calculated only on the principal amount

Question 7

What is the simple interest formula?

Accepted Answer

I = P 	imes r 	imes t

Question 8

What is a budget?

Accepted Answer

A plan for spending and saving money over a specific period

Question 9

What is an emergency fund?

Accepted Answer

Money set aside for unexpected expenses

Question 10

What is inflation?

Accepted Answer

The rate at which prices for goods and services increase over time

Financial Literacy