How to Plan a Savings Goal With AI Quiz

Answers and explanations appear as you take the quiz.

1. You have $1,500 saved and want a $6,000 emergency fund in 18 months. Ignoring interest, what is the monthly target?
   • $333.33
   • $250
   • $300
   • $416.67
2. How does the guide suggest setting up a sinking fund for an annual insurance premium?
   • Put the whole premium on a credit card
   • Wait until the bill arrives
   • Divide the yearly cost by 12 and save that much each month
   • Invest the premium amount in stocks
3. Someone paid every two weeks needs to save $300 a month. Why shouldn't they just save $150 per paycheck?
   • There are 26 biweekly paychecks a year, not 24
   • Biweekly pay is taxed differently
   • Banks require weekly transfers
   • Interest is paid every two weeks
4. For a two-year savings goal, what role does interest usually play?
   • It covers most of the goal
   • It doubles your contributions
   • It is guaranteed at a fixed rate
   • It reduces the required contribution only modestly, while deposits do most of the work
5. Which figure should you compare between savings accounts, since it includes compounding?
   • APR
   • APY
   • The prime rate
   • The monthly fee
6. In =PMT(rate/12, months, -current, goal), why is the result negative?
   • The formula is set up wrong
   • The goal cannot be reached
   • Interest rates are negative
   • It shows the deposits as money leaving your hands
7. If the monthly savings amount isn't affordable, which options does the guide list?
   • Borrow money to fill the gap
   • Ignore the budget and hope
   • Extend the deadline, lower the target or free up money elsewhere
   • Assume a higher interest rate
8. How should a yearly APY be converted into a monthly rate for precise calculations?
   • (1 + APY)^(1/12) − 1
   • APY × 12
   • APY ÷ 26
   • APY − 1