Saving and Spending

Question 1

Needs vs wants

Answer 1

A need is something you require to live and function in your daily lives.
A want is something we desire to improve our quality of life.

Question 2

Define opportunity cost

Answer 2

the loss of the next best alternative when one alternative is chosen.

Question 3

Role of banks in the economy

Answer 3

a bank is a business that wants to make a profit, so it accepts money as savings (deposits) at a lower rate and lends that money at a higher rate

Question 4

how to calculate simple and compound interest

Answer 4

simple interest - prt/100
compound interest - p(1 + r)^t

Question 5

Basic banking products including savings accounts and credit cards

Answer 5

Transaction accounts, deposits, savings, insurance

Question 6

Methods of preparing a personal budget

Answer 6

1. expenses
2. income
3. estimated cash
4. surplus/deficit

Question 7

distinguishing between weekly, monthly and quarterly expenses

Answer 7

Fortnightly = 2 weeks
Quarterly = 3 months