Financial literacy test: 12 questions with answers

Question 1

You put $100 in a savings account paying 2% a year and leave it alone for 5 years. How much is in the account at the end?

• AMore than $102
• BExactly $102
• CLess than $102
• DImpossible to say

Question 2

Your savings earn 1% a year and prices rise 2% a year. After one year, what can your savings buy?

• AMore than today
• BExactly the same as today
• CLess than today

Question 3

True or false: buying shares in a single company usually gives a safer return than a fund that holds hundreds of companies.

• ATrue
• BFalse

Question 4

You owe $3,000 on a credit card at 24% APR and pay a fixed $100 a month. Roughly how long until it's paid off?

• AAbout 1 year
• BAbout 2 years
• CAbout 4 years
• DMore than 10 years

Question 5

Account A pays 4.00% APY. Account B pays 3.95% a year, compounded daily. Which earns more over a year?

• AAccount A
• BAccount B
• CThey earn exactly the same

Question 6

Most countries tax income in bands. If a raise takes you into a higher band, which income is taxed at the higher rate?

• AAll of your income
• BOnly the part above the band's starting point
• COnly your raise, at double the rate
• DNone of it until next year

Question 7

What's the usual guideline for the size of an emergency fund?

• AOne week of spending
• BThree to six months of essential costs
• CA year of gross salary
• DWhatever is left at the end of the month

Question 8

A caller from 'your bank's fraud team' says your account is under attack and asks you to move your money to a safe account. What should you do?

• AMove it quickly, before it's stolen
• BMove half, to be careful
• CHang up and call the number on your card
• DGive them your PIN so they can freeze the account

Question 9

Two funds both make 6% a year before fees. One charges 0.2% a year, the other 1.2%. On $10,000 left for 30 years, roughly how much more does the cheaper one end up with?

• AAbout $300
• BAbout $3,000
• CAbout $13,000
• DAbout $30,000

Question 10

At 8% a year, roughly how long does money take to double?

• AAbout 5 years
• BAbout 9 years
• CAbout 15 years
• DAbout 25 years

Question 11

If interest rates rise, what usually happens to the price of bonds you already own?

• AIt rises
• BIt falls
• CIt stays the same

Question 12

Which of these usually helps a credit score?

• AOpening several new cards in the same month
• BUsing a small share of your credit limits and paying on time
• CKeeping one card maxed out and paying the minimum
• DNever using credit at all