Test Your Financial Literacy Question Title * 1. Q1. Which of the below repayment strategies will help you pay your loan off fastest? Paying $1500 per month Splitting the repayment into two and paying $750 per fortnight Multiplying monthly repayment by 12, then dividing by 26 and paying $692 per fortnight I don’t know Question Title * 2. Credit cards sometimes offer 55 days interest free, this means you don’t pay interest on any purchases until 55 days after you buy the item. Is this: True False I don’t know Question Title * 3. Your credit card has an outstanding debt of $3,000 with an interest rate of 18%p.a. The minimum monthly repayments are set at 2% of the closing balance. If you only made the minimum repayment, how long until you pay it off? Pay off in 1 year Pay it off in 5 years Pay it off in 25 years I don’t know Question Title * 4. When working out how much you should insure your house for, you should base it on: The amount you paid for the property The amount it would cost to rebuild your home The amount you would get if you sold your home I don’t know Question Title * 5. What is a common feature of a savings account? Savings accounts are a way to save money and earn interest You can access your savings account with a card linked to your account Savings accounts are normally the account that you use when shopping Savings account are best for when you have lots of money Question Title * 6. What does it mean to refinance your home? Obtaining a new loan to repay an existing one. Adding a bulk payment of funds to your home loan. Receiving a discount on your current loan. Switching to a fixed interest rate. Transferring your home loan to your parents. Question Title * 7. How do you define equity? When you and your partner own your home together. When you open a joint account with someone. The value of your home minus the amount you still owe on your loan. The amount you still owe the bank on your loan. When $US and $AUD are both equal. Question Title * 8. What is compound interest? When your interest rate is decreased. When you switch banks and encounter a different interest rate. When you earn interest on the interest already earned on your account balance. The bank’s average interest rate for the financial year. When your interest in finance combines with other hobbies. Question Title * 9. What is an advantage of an offset account? It can help you pay off your home loan faster by reducing the interest you pay. It increases the interest on your savings by offsetting your daily interest calculated. It provides a better home loan rate by offsetting the interest. You can manage with fewer bank accounts. It prevents your fixed-rate home loan from increasing by offsetting the interest. Question Title * 10. Redraw and offset are the same thing True False I don’t know Question Title * 11. What does a ‘balloon payment’ refer to? A final amount due on a loan that is structured as a series of monthly payments followed by a larger amount at the end of the loan period. A large upfront deposit with lower regular repayments I am unsure Question Title * 12. If you deposited $100 into a savings account with an annual interest rate of 2% and then leave the money in that account for 5 years, how much would you have saved? More than $102 Exactly $102 Less than $102 Don’t know Question Title * 13. Suppose your savings account interest rate is 1% per year and inflation is 2% per year. After 1 year, with the money in this account, would you be able to buy… More than today Exactly the same as today Less than today Don’t know Question Title * 14. Buying shares in a single company usually provides a safer return than buying shares in multiple ASX listed companies. True False Don’t know Question Title * 15. What is a loan comparison rate? The average interest rate from all loans available The interest rate including certain fees and charges relating to the loan The interest rate minus discounts available on the loan The default rate you will get if you don't ask the lender for a discount I am not sure The Financial Literacy Quiz is provided for personal educational purposes only. The results are a guide only and can be used as a starting point as you continue your financial education journey. We do not collect your personal information, but we may use results anonymously for research purposes. Done
