Americans Flopped This Personal Finance Quiz. Can You Do Better?

Photograph by Stephen Smith

Only 14 percent of Americans correctly answered all five questions in a survey of financial literacy that was released May 30. Keep reading to the bottom of this article to see if you can do better.

The online survey of more than 25,000 adults found that although Americans may not be too smart about finance, they think they are. The FINRA Investor Education Foundation found that nearly three-quarters of respondents gave themselves high marks for financial literacy (5 to 7 on a 7-point scale).

Ignorance can be costly. “Financial literacy is found to be strongly correlated with behavior that is indicative of financial capability,” the report says. “Specifically, those with higher literacy are more likely to plan for retirement and to have an emergency fund, and less likely to engage in expensive credit card behaviors.”

The FINRA Investor Education Foundation was partly funded with about $55 million in fines from a court-approved Securities and Exchange Commission settlement with Wall Street firms and two analysts, Jack Grubman and Henry Blodget, over charges that they issued biased recommendations to win investment banking business. It has also received money from other fines and from donations by FINRA, the securities industry’s self-regulatory organization, which was formed from the regulatory operations of the National Association of Securities Dealers and the New York Stock Exchange.

The good news from the survey is that Americans’ ability to make ends meet has improved somewhat since the first time the survey was conducted in 2009, while the economy was still in recession. The bad news: Most Americans still haven’t set up “rainy day” funds, and more than two in five credit-card holders “engage in costly behaviors” with their cards such as paying the monthly minimum, paying late fees, paying over-the-limit fees, and taking cash advances. As for financial literacy, it was highest among males, older respondents, whites, and Asians, those with higher income, and those with more education.

Here are the questions, along with the percentage of people who gave each answer. The correct answers are at the bottom. (Don’t peek.)

1. Suppose you had $100 in a savings account and the interest rate was 2% per year. After 5 years, how much do you think you would have in the account if you left the money to grow?

  • More than $102 75%
  • Exactly $102 7%
  • Less than $102 6%
  • Don’t know 11%
  • Prefer not to say 1%

2. Imagine that the interest rate on your savings account was 1% per year and inflation was 2% per year. After 1 year, how much would you be able to buy with the money in this account?

  • More than today 9%
  • Exactly the same 9%
  • Less than today 61%
  • Don’t know 20%
  • Prefer not to say 1%

3. If interest rates rise, what will typically happen to bond prices?

  • They will rise 20%
  • They will fall 28%
  • They will stay the same 5%
  • There is no relationship between bond prices and the interest rate 9%
  • Don’t know 37%
  • Prefer not to say 1%

4. A 15-year mortgage typically requires higher monthly payments than a 30-year mortgage, but the total interest paid over the life of the loan will be less.

  • True 75%
  • False 9%
  • Don’t know 15%
  • Prefer not to say 1%

5. Buying a single company’s stock usually provides a safer return than a stock mutual fund.

  • True 9%
  • False 48%
  • Don’t know 42%
  • Prefer not to say 1%


1. More than $102
2. Less than today
3. They will fall
4. True
5. False

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