Quiz – Understanding Debt Basics

Question 1 of 6

1. Question

How does the capsule define debt?

Borrowed money you must repay with interest

Correct Incorrect Correct answer

Money you receive and never repay

Correct Incorrect Correct answer

Savings kept in a bank account

Correct Incorrect Correct answer

A gift from a financial institution

Correct Incorrect Correct answer

Question 2 of 6

2. Question

Which of these is given as an example of consumer debt?

Credit cards and personal loans

Correct Incorrect Correct answer

A mortgage on a home

Correct Incorrect Correct answer

A business expansion loan

Correct Incorrect Correct answer

A federal student loan

Correct Incorrect Correct answer

Question 3 of 6

3. Question

Simple interest is calculated on:

Only the original amount borrowed

Correct Incorrect Correct answer

Interest charged on top of interest

Correct Incorrect Correct answer

Your total future income

Correct Incorrect Correct answer

The lender’s profit margin

Correct Incorrect Correct answer

Question 4 of 6

4. Question

A 5000 dollar credit card debt at 20 percent annual interest, after two years without payments, grows to about:

Nearly 7000 dollars

Correct Incorrect Correct answer

About 5100 dollars

Correct Incorrect Correct answer

About 5500 dollars

Correct Incorrect Correct answer

About 10000 dollars

Correct Incorrect Correct answer

Question 5 of 6

5. Question

Match each debt type to its purpose.

Sort elements

Credit cards for everyday purchases
Financing home ownership over decades
Investing in education
Helping companies grow

Consumer debt

Correct Incorrect Correct answer

Mortgage debt

Correct Incorrect Correct answer

Student loans

Correct Incorrect Correct answer

Business debt

Correct Incorrect Correct answer

Question 6 of 6

6. Question

Match each interest concept to its description.

Sort elements

Charged only on the original amount
Interest charged on interest
More interest accumulates over time
Reduces total interest paid

Simple interest

Correct Incorrect Correct answer

Compound interest

Correct Incorrect Correct answer

Longer repayment

Correct Incorrect Correct answer

Early repayment

Correct Incorrect Correct answer