Week 2: Financial Literacy

Question 1

Midshipmen pay

Answer 1

35% Base pay of an O-1 with less than 2 years of service

Question 2

Pay rates per class

Answer 2

4/C: $125
3/C: $225
2/C: $300
1/C: $500

Question 3

When are pay days?

Answer 3

Beginning of each month

Question 4

When is Held Pay released?

Answer 4

• February
• July
• November

Question 5

Held Pay per class

Answer 5

4/C: Not eligible for Held Pay
3/C: $1,500
2/C: $1,350
1/C: $1,000

Question 6

Where can Held Pay be found?

Answer 6

• “Summary” column, on the line labeled “Cr Fwd”

Question 7

Amount of the ACE Loan?

Answer 7

$8,500

Question 8

When are Mids required to file their taxes?

Answer 8

15 Apr

Question 9

Coverage of the SGLI?

Answer 9

$400,000

Question 10

Amount for COMRATS

Answer 10

$12.30

Question 11

What is a Checking Account?

Answer 11

‘Everyday use account’

Question 12

What is a Savings Account?

Answer 12

• Modest interest rates

- Use as an emergency fund

Question 13

What is a Money Market Account?

Answer 13

• Pays higher interest

- Used for short-term savings and emergency funds

Question 14

What are Certificates of Deposit?

Answer 14

• Funds borrowed by the bank

- Primarily used for short-term financial goals up to 5 years

Question 15

What are Stocks?

Answer 15

Common (For the Rich) - Entitles the owner to vote at shareholder’s meetings and to receive dividends

Preferred (Low risk; For the People) - Does not have voting rights but has a higher claim on assets

Question 16

Types of IRAs?

Answer 16

• Traditional

- Roth (at a young age, Roths typically return more money)

Question 17

What is the Career Starter Loan?

Answer 17

Available at the end of your 3/C year, may range up to $36,000

Question 18

What is Interest?

Answer 18

• Charge for the privilege of borrowing money

- Higher the interest, the more money you pay or make

Question 19

Types of Interest

Answer 19

• Compound - charged on the amount borrowed or lent plus the interest it has accrued
• Simple - Does not compound; only charged one the amount borrowed or lent

Question 20

Good Money Habits

Papa Bear Lives Pretty Suave

Answer 20

• Pay yourself first
• Budgeting
• Live below your means
• Pay with cash
• Save for retirement

Question 21

Bad Money Habits

Louie Made No Payment

Answer 21

• Living paycheck to paycheck
• Max out your credit cards
• Not reviewing your Credit Reports
• Paying the minimum on Credit Cards

Question 22

Three Credit Agencies

Answer 22

• Experian
• Equifax
• Transunion

Question 23

Bad Credit range

Answer 23

<630

Question 24

Fair Credit range

Answer 24

630-689

Question 25

Good Credit range

Answer 25

690-719

Question 26

Excellent Credit range

Answer 26

720-850

Question 27

Types of Credit ranges

Answer 27

Bad Fair Good Excellent

Question 28

Benefits of the SCRA

Answer 28

Reduce or cap interest rates on any credit card or other loans you acquired before you entered the military to 6% per year

Question 29

Who is the Midshipmen Financial Advisor?

Answer 29

LT Andrew Hughes | Bancroft C209

Question 30

Who is the Midshipmen DISBO?

Answer 30

LT Daniel Montieth | Bancroft 4002