UGBA 135 Midterm
Emergency fund - correct answer in a savings account 3-6 months living expenses
Definition of millionaire - correct answer financially independent
Rule of 72 - correct answer The number of years it takes for a certain amount to double in value is equal
to 72 divided by its annual rate of interest.
Each time you get paycheck, what is % goal you should put away (savings goal) - correct answer 20%
What does being frugal mean - correct answer not spending freely or unnecessarily, but considering
quality, value, needs and benefits along with price
Opening checking accounts, bank accounts → fees and balance requirements are different - correct
answer checking: 2 months
savings: 4-6 months
monthly fees
Survey 25 - 65, % of them become financially indpt. After reaching retirement age - correct answer start
working at 25, by 65:
1 will be rich
4 will be financially independent, able to take care of themselves
45 will have some funds but will still need some form of continuing financial aid
50 will essentially be broke
5% households financially indpt.
, What is a spending plan - correct answer An income and expense statement sometimes referred to as a
budget which records both planned and actual income and expenses over a period of time
Biggest reason to start saving as early as possible - correct answer compound interest
What is compound interest - correct answer Earning interest on interest
What is rule of fred - correct answer I get paid first
In times of inflation, do interest rates go up or down - correct answer interest goes up
What is a notary public - correct answer A public official authorized to attest to the authenticity of
signatures.
401k plan - correct answer a tax-deferred investment and savings plan that acts as a personal pension
fund for employees made by employers
employer contributing/match, always put in enough to maximize what employer puts in - correct answer
for 401k plans to maximize money
Most important factor in determining credit score - correct answer payment history
Highest credit score you can get? - correct answer 850
Best way to establish good credit - correct answer Borrow money and pay it back on time according to its
terms
and when you dont need it
Debt:credit ratio - correct answer total balance on your credit cards and other loans compared to your
total credit limit
Emergency fund - correct answer in a savings account 3-6 months living expenses
Definition of millionaire - correct answer financially independent
Rule of 72 - correct answer The number of years it takes for a certain amount to double in value is equal
to 72 divided by its annual rate of interest.
Each time you get paycheck, what is % goal you should put away (savings goal) - correct answer 20%
What does being frugal mean - correct answer not spending freely or unnecessarily, but considering
quality, value, needs and benefits along with price
Opening checking accounts, bank accounts → fees and balance requirements are different - correct
answer checking: 2 months
savings: 4-6 months
monthly fees
Survey 25 - 65, % of them become financially indpt. After reaching retirement age - correct answer start
working at 25, by 65:
1 will be rich
4 will be financially independent, able to take care of themselves
45 will have some funds but will still need some form of continuing financial aid
50 will essentially be broke
5% households financially indpt.
, What is a spending plan - correct answer An income and expense statement sometimes referred to as a
budget which records both planned and actual income and expenses over a period of time
Biggest reason to start saving as early as possible - correct answer compound interest
What is compound interest - correct answer Earning interest on interest
What is rule of fred - correct answer I get paid first
In times of inflation, do interest rates go up or down - correct answer interest goes up
What is a notary public - correct answer A public official authorized to attest to the authenticity of
signatures.
401k plan - correct answer a tax-deferred investment and savings plan that acts as a personal pension
fund for employees made by employers
employer contributing/match, always put in enough to maximize what employer puts in - correct answer
for 401k plans to maximize money
Most important factor in determining credit score - correct answer payment history
Highest credit score you can get? - correct answer 850
Best way to establish good credit - correct answer Borrow money and pay it back on time according to its
terms
and when you dont need it
Debt:credit ratio - correct answer total balance on your credit cards and other loans compared to your
total credit limit
