In Section 4, you learned about money management. Now, you'll apply what you learned.

Question

1. List at least three of your financial goals. Explain whether they are short-term, intermediate, or long-term. (1-3 sentences. 3.0 points)

2. List at least three things you would consider when choosing a bank and account type. (1-3 sentences. 3.0 points)

3. Describe at least four ways you can take money out of a checking account. (1-4 sentences. 2.0 points)

4. Calculate the ROI dollar amount and percentage for these example investments.

a. You invest $50 in a government bond that says you can redeem it a year later for $54. Use the instructions in Lesson 3 to calculate the ROI dollar amount and percentage. (2.0 points)
TIP: Subtract the initial investment from the total return to get the ROI dollar amount. Then divide the ROI dollar amount by the initial investment, and multiply that number by 100 to get the percentage.

b. You invest $100 in stocks and sell them one year later for $115. Use the instructions in Lesson 3 to calculate the ROI dollar amount and percentage. (2.0 points)
TIP: Subtract the initial investment from the total return to get the ROI dollar amount. Then divide the ROI dollar amount by the initial investment, and multiply that number by 100 to get the percentage.

5. Describe at least three investments you want to make with your income. Explain whether each one is an equity investment or a debt investment, and explain why you chose these particular types of investments. (1-6 sentences. 3.0 points)
make it for a 10th grader

Answer 1

Sure! Here’s how a 10th grader might approach these financial concepts:

1. Financial Goals:

   • Saving for a new phone: This is a short-term goal because I want to achieve it in the next 6 months.
   • Building an emergency fund: This is an intermediate goal, as I plan to save for about 2-3 years to have a few months’ worth of expenses set aside.
   • Saving for college: This is a long-term goal, since I’m looking at a time frame of 5 years or more to save enough money for tuition and other expenses.

2. Choosing a Bank and Account Type:

   • Fees: I would consider the account fees, like monthly maintenance fees, to make sure I'm not losing money just to keep my account open.
   • ATM Access: I would look for a bank with many ATMs nearby so I can easily access my money without additional fees.
   • Interest Rates: I would check the interest rates on savings accounts to see how much my money could grow over time while I save.

3. Ways to Take Money Out of a Checking Account:

   • ATM Withdrawal: I can use my debit card at an ATM to take out cash.
   • Writing a Check: I can write a check to pay for something, and the money is taken directly from my checking account.
   • Electronic Transfer: I can electronically transfer money to someone else's account or pay bills directly online.
   • Point of Sale Purchase: I can use my debit card to make purchases in stores or online, which also takes money from my checking account.

4. ROI Calculation: a. Government Bond:

   • Initial Investment: $50
   • Total Return: $54
   • ROI Dollar Amount: $54 - $50 = $4
   • ROI Percentage: ($4 ÷ $50) × 100 = 8%

   b. Stocks:

   • Initial Investment: $100
   • Total Return: $115
   • ROI Dollar Amount: $115 - $100 = $15
   • ROI Percentage: ($15 ÷ $100) × 100 = 15%

5. Investments I Want to Make:

   • Investing in a technology stock: This would be an equity investment, as I would be buying shares of a company. I’m interested in this because I believe technology will continue to grow and become more important.
   • Buying a savings bond: This would be a debt investment since I’m lending money to the government in exchange for interest. I chose this type because it is generally considered safe and a good way to save for the future.
   • Contributing to my retirement account: This is also an equity investment if I choose stocks within the account. I want to start early to take advantage of compounding interest over time, helping me secure my financial future.