A FINRA study reveals only 18% of millennials are able to correctly answer 4 out of 5 questions about finance. Are you smarter than a Millennial?
Links mentioned in the show:
- FINRA news release: Study Finds Millennials Struggle Financially
- Take the quiz yourself by following this link: http://www.usfinancialcapability.org/quiz.php
- Amortization schedule for 15yr mortgage (assumes 6% rate on $150,000 borrowed)
- Amortization schedule for 30yr mortgage (Note that the 1st month interest is the same as a 15yr!)
Suppose you have $100 in a savings account earning 2% interest a year. After 5 years, how much would you have?
A) More than $102
B) Exactly $102
C) Less than $102
D) Don’t know
Imagine the interest rate on your savings account is 1% a year and inflation is 2% a year. After one year would the money in the account buy more than it does today, exactly the same or less than today?
D) Don’t Know
If interest rates rise, what will typically happen to bond prices? Rise, fall, stay the same, or is there no relationship?
C) Stay the Same
D) No Relationship
E) I don’t know
True or False: A 15-year mortgage requires higher monthly payments than a 30-year mortgage but the total interest over the life of the loan will be less.
C) Don’t Know
True or False: Buying a single company’s stock usually provides a safer return than a stock mutual fund.
C) Don’t Know
The national average is 2.88 out of 5. How will did you do?
OK, I won’t keep you in suspense any longer. The answers are as follows:
1 – A, 2 – C, 3 – B, 4 – A, 5 – B