Most current and recent grads could not answer these basic money questions posed by Sally Mae. Can you?
See how many of these below questions you can answer correctly!
- Suppose you had $100 in a savings account and the interest rate was 2% per year. After 5 years, how much do you think you would have in the account if you left the money to grow?
- Assuming the following individuals have the same credit card with the same interest rate and balance, which will pay the most in interest on their credit card purchases over time?
- Imagine that there are two options when it comes to paying back a loan and both come with the same interest rate. Provided you have the needed funds, which option would you select to minimize your total costs over the life of the loan (i.e., all of your payments combined until the loan is completely paid off)?
- Which of the following best defines the term “interest capitalization?”
Based on the results, only 83% of grads got the first question correct. Even though the questions are basically asking about interest, its vital information.
I have been working in the financial field for years so being exposed to this type of information early helped in my financial decision making but it didn’t keep me from making some mistakes.
What’s your biggest financial struggle? Are you comfortable in your financial shoes?
Intern / Darian / The MRL Morning Show