Ch Mountain America Credit Union Quiz

The correct answer is "a necessity to my family and I." This answer implies that having a financial plan and being committed to it is important for the well-being and financial stability of the individual's family. It suggests that without a financial plan, the person's finances may be at risk, and therefore, it is necessary to have a plan in place to ensure the financial security of their family.

A bank savings account is the safest place for Lindsay's college money because it offers security and protection for her funds. The money in a bank savings account is insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000, which means that even if the bank were to fail, Lindsay would still be able to access her money. Additionally, a bank savings account provides easy access to her funds when she needs them for college expenses.

Starting a savings account is the correct answer because it is a responsible financial decision for someone who has just started working. A savings account allows individuals to set aside money for future expenses or emergencies, and it helps in building a financial cushion. It is important to prioritize saving money and establishing good financial habits early on in one's career. This will help in achieving financial stability and reaching long-term financial goals.

A responsible credit counseling service such as the Consumer Credit Counseling Services can help individuals who are behind on their debt payments by working with the lenders to establish a payment schedule that is manageable for the individual. This means that the credit counseling service can negotiate with the lenders to come up with a plan that allows the individual to repay their debts in a way that fits their financial situation. This can help the individual to avoid further financial difficulties and work towards becoming debt-free.

Credit unions typically offer lower rates compared to traditional banks because they are not-for-profit organizations owned by their members. This means they can prioritize providing competitive rates and fees to benefit their members rather than generating profits for shareholders. Additionally, credit unions often have lower operating costs and can pass on these savings to their members in the form of lower interest rates on loans and higher interest rates on savings accounts. This can make credit unions an attractive option for individuals looking for better rates and lower fees.

A 15-year mortgage typically requires higher monthly payments because the loan is being paid off in a shorter period of time. However, the total interest over the life of the loan will be less because the loan is being paid off more quickly, resulting in less time for interest to accumulate. This means that the borrower will save money on interest payments in the long run.

The primary sources of income for most people age 20-35 are salaries, wages, and tips. This is because individuals in this age group are typically starting their careers and are more likely to be employed in entry-level positions that pay a fixed salary or hourly wage. Additionally, they may also rely on tips if they work in service industries such as restaurants or hospitality. Profits from business, rents, and dividends and interest are less common sources of income for individuals in this age group, as they are more commonly associated with individuals who are older and have had more time to accumulate wealth or invest in businesses or properties.

The statement "You can get cash anywhere in the world with no fee" is not correct about most ATM cards. While ATM cards allow you to withdraw cash from ATMs, there are often fees associated with international withdrawals. These fees can vary depending on the bank and the location of the ATM. Therefore, it is not accurate to say that you can get cash anywhere in the world with no fee using most ATM cards.

If you have $100 in a savings account earning 2% interest a year, after five years, the interest earned would be $10. Therefore, the total amount in the savings account would be $110, which is more than $102.

Buying a single company's stock does not usually provide a safer return than a stock mutual fund. This is because investing in a single company's stock exposes an individual to a higher level of risk, as the performance of that one company can significantly impact the investment. On the other hand, a stock mutual fund offers diversification by investing in a portfolio of stocks from different companies, which helps to spread the risk and potentially provide a more stable return. Therefore, the statement is false.

Eric will pay less because the car is collateral for the loan. When a loan is secured by collateral, such as a car, it reduces the lender's risk. If the borrower defaults on the loan, the lender can repossess the car and sell it to recover their money. This lower risk for the lender often results in lower interest rates and finance charges for the borrower. Since Matt's loan for the vacation does not have collateral, he is considered a higher risk borrower and will likely have a higher finance charge.

Banks and other lenders share credit history of their borrowers with each other and are likely to know of any loan payments that you have missed. This means that if you have a bad loan payment record with one bank and apply to another bank for a loan, they will be aware of your past missed payments and it may affect their decision to approve your loan.

Paying the full amount owed for that month is the best way to manage credit card debt because it helps to avoid accumulating interest charges and potential late fees. By paying the full amount, it ensures that the debt is being paid off in a timely manner and reduces the overall balance owed. This approach also promotes responsible financial habits and helps to maintain a good credit score.

The correct answer is to set aside 10%-15% of your monthly income as monthly savings. This is a common recommendation in personal finance to ensure that individuals save a portion of their income for future needs or emergencies. By setting aside this percentage, individuals can build a savings cushion and work towards their financial goals.

Jessica, who only pays the minimum amount each month, is likely to pay the greatest dollar amount in finance charges per year. This is because by only paying the minimum amount, she is carrying a balance on her credit card and accruing interest on that balance. Over time, the interest charges can accumulate and result in a higher overall dollar amount paid in finance charges compared to the other users who pay off their credit card bills in full or make additional payments.

Earning a 4-year degree from college generally leads to higher earning potential compared to having only a high school diploma. The answer "a lot more; about 70% more" suggests that individuals with a college degree can expect to earn approximately 70% more than those with just a high school diploma. This indicates that obtaining a college degree significantly increases the likelihood of higher income and career opportunities.

Justin's total monthly expenses can be calculated by adding up all the expenses mentioned: $800 (rent) + $200 (groceries) + $200 (transportation) + $100 (clothing) + $150 (restaurants) + $250 (everything else) = $1,700.

To calculate how much he can save each month, we subtract his total expenses from his take-home pay: $2,000 - $1,700 = $300.

Since Justin wants to accumulate savings of $900, we divide the savings goal by the amount he can save each month: $900 / $300 = 3 months.

Therefore, it will take him 3 months to accumulate savings of $900.

The correct answer is Federal income tax, social security, and Medicare contributions. When calculating take-home pay, various deductions are made from the total earnings. In this case, federal income tax is deducted based on the individual's tax bracket. Additionally, social security and Medicare contributions are taken out to fund these government programs. Sales tax and property tax are not typically deducted from an individual's paycheck.

Borrowing money to buy a car in order to get a much better paying job can be financially beneficial. Although borrowing money means taking on debt, it can be justified in this scenario because the increased income from the better job can offset the cost of the loan. In the long run, the higher salary earned from the better job can help repay the loan and potentially lead to greater financial stability and savings.

Your credit record can be checked once a year for free. This means that individuals have the right to access their credit history annually without any cost. This allows them to review their credit information and ensure its accuracy. It is important to regularly check credit records to identify any errors or discrepancies that may negatively impact creditworthiness.

The credit card company will reduce its risk by starting Karen out with a small line of credit to see how she handles the account. This is because Karen is young, has no credit history, and few valuable possessions, making her a higher risk borrower. By giving her a small line of credit, the credit card company can assess her creditworthiness and responsible behavior before granting her a higher credit limit. This helps to mitigate the risk of potential default or delinquency on her part.

The interest rate on the savings account is lower than the inflation rate. This means that the value of the money in the account will not increase as much as the cost of goods and services, resulting in a decrease in purchasing power. Therefore, the money in the account will be able to buy less than it does today.

A house financed with a fixed-rate mortgage would best protect the purchasing power of a family's savings in the event of a sudden increase in inflation. This is because the fixed-rate mortgage locks in the interest rate, so the monthly mortgage payment remains the same regardless of inflation. As inflation increases, the value of the house and the rental income it generates are likely to increase, providing a hedge against inflation and preserving the purchasing power of the family's savings.

As Maria's income has doubled after graduation, her federal income taxes will also increase. Generally, higher income leads to a higher tax bracket, resulting in a larger tax liability. Therefore, the total dollar amount Maria will have to pay in Federal Income taxes in her new job will be at least double compared to when she was in college.

The correct answer is that if your parents become unemployed, your insurance coverage may stop, regardless of your age. This is because many young people receive health insurance benefits through their parents, and if their parents lose their jobs and their health insurance coverage, the young person's coverage may also be affected. Age is not a determining factor in this situation.

If John and Jenny needed money right away, it would be of least benefit to them if it was invested in a down payment on the house. This is because the money invested in a down payment is typically tied up in the property and not easily accessible. On the other hand, stocks, savings accounts, and checking accounts are more liquid and can be readily accessed in case of emergencies.

The correct answer states that income tax may be charged on the interest if your income is high enough. This means that if you earn a significant amount of interest from your savings account, you may be required to pay income tax on that interest. The other options are incorrect because they either mention sales tax, age restrictions, or state that earnings from savings account interest may not be taxed, which is not true in most cases.

Sales taxes are additional charges imposed on the purchase of goods and services. These taxes are added to the final price of the product, making it more expensive for the buyer. The other statements are incorrect because sales taxes are not based on income level, the national sales tax percentage rate can vary across different countries or states, and sales taxes are typically not deducted from an individual's paycheck by the federal government.

Choosing to attend a state college rather than a private college would not likely reduce the finance charge rate. The finance charge rate is determined by the terms of the loan and the borrower's creditworthiness, not by the type of college attended. Therefore, this option is unrelated to reducing the finance charge rate.

Stocks tend to have the highest growth over long periods of time, such as 18 years. While U.S. Government savings bonds, savings accounts, and checking accounts may provide some level of interest or return on investment, they typically offer lower rates compared to the potential gains from investing in stocks. Stocks have historically shown higher returns on investment over the long term, although they also come with higher levels of risk and volatility. Therefore, investing in stocks can potentially provide the highest growth for Kelly and Pete's baby's education fund over an 18-year period.