Simple Questions a Quarter of American
Students Cannot Answer
When it comes to financial intelligence, a lot of Americans cannot demonstrate a deep understating of the subject. That is the reason why they are not able to plan what to spend their money on, how to invest and how to save. Taking into account the growing cost of university tuition fees, it is important for a family to figure out how to earn enough money to make certain their child goes to college. What is more, the problem is rather common for American students, 25 percent of which cannot even answer basic finance questions.
Learning at school and going to university has become very expensive in the United States of America. One needs to buy books, pay tuition, as well as have some extra money for food and activities. Yet, getting a degree plays a vital role and is of key importance when applying for a job. Many students have huge student debt because they simply cannot pay tuition right away. Even getting a part-time job at a coffee shop, tutoring or teaching does not help to cover it. However, there is also another side of the problem. A lot of Americans have zero knowledge when it comes to financial intelligence. Here are four basic finance-related questions which ¼ of American students cannot answer.
These questions are dedicated to four various topics: interest accumulation, interest terminology, effects of payment behavior on credit cost and impact of repayment term on cost of credit. The questions are as follows:
- How much money in your account will you have after five years if you start by having $100 in that savings account with 2% interest rate per year and do not spend that money?
- Define the term ‘interest capitalization’.
- There are different individuals who have the same credit card and the same interest rate on it. However, they pay different sums of money during different periods of time. The task is to figure out who will pay the most interest for their purchases over time (Joe makes minimum payment on the card every month; Joyce sometimes pay the minimum, sometimes less, as well as has already missed one payment; Jane pays in full every month).
- The final question deals with choosing the option to minimize the total costs over the life of the loan provided that both these options have the same interest rate (in accordance with option one you are allowed to take ten years to pay back the loan, in regards of option number two – twenty years).
The main reason why the inability of 25 percent of American students to answer these simple questions is so worrisome is that it will have a negative impact on the future of society. Americans are used to living in debt. They use credit card on a daily basis and do not really think about consequences. However, someone will eventually have to pay. If it is not them, it may be their children or relatives who will have to give up their house to cover the debt. Therefore, it is vital to educate not only students, but also the whole population of the country about the so-called financial literacy to make certain people understand how to spend their money responsibly.
Acquiring useful knowledge in the field of finance helps you make smarter decisions when it comes to spending money. What is vital to mention is that it does not matter whether you have chosen home-schooling or attending a traditional school. The problem lies in the lack of information in regards to the area of finance. Nowadays, a lot of useful information is available online. Studying this subject will be of great use later on.
However, finance is not the only subject students often have difficulties with. Sometimes, the task of writing a paper about yourself can make you feel puzzled and confused. If you need help writing an essay, there are a few trustworthy order essay writing services available. Thus, you can be provided with a well-written sample essay about yourself orderessay and will no longer have to google something like “I need help writing an essay.” High-quality help writing an essay about yourself is right at your disposal. Feel free to get expert assistance with academic writing whenever you feel like you need it.