Not so popular, quiz about MONEY

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Created for MONEY MASTERS KA1 E+ project

Not-So-Obvious Money & Finance Quiz

Not-So-Obvious Money & Finance Quiz

1. Which typically costs more over the full term of the loan?
A $150,000 mortgage at 4% for 30 years
A $30,000 car loan at 7% for 5 years
They cost approximately the same over their full terms
It depends entirely on the down payment amount
Explanation: While the mortgage has a higher principal amount, the car loan costs proportionally more over time! The $30,000 car loan at 7% for 5 years results in paying about $5,600 in interest (19% of the principal). The $150,000 mortgage at 4% for 30 years results in paying about $107,800 in interest, which is 72% of the principal, but spread over a much longer period. When comparing the ratio of interest to principal per year, the car loan is significantly more expensive on a time-adjusted basis.
2. According to research in behavioral economics, which spending choice generally produces more happiness?
Spending $100 on yourself
Spending $50 on someone else
Saving the entire amount
Splitting it equally between yourself and someone else
Explanation: Multiple studies, including notable research by Elizabeth Dunn and colleagues, have found that spending money on others (called “prosocial spending”) often creates more happiness than spending on ourselves—even when the amount is smaller. This challenges our intuition that more money spent on ourselves leads to more happiness. This psychological phenomenon is sometimes called the “helper’s high” and demonstrates that the link between money and happiness isn’t always straightforward.
3. What is considered the oldest continuously used currency still in circulation today?
British Pound (GBP)
Chinese Yuan/Renminbi
Indian Rupee
Japanese Yen
Explanation: While many people think it’s the British Pound, the Chinese Yuan (in various forms) has been in continuous use since around 1600 BCE. The term “yuan” has been used to refer to a round coin with a square hole in the middle for over 2,500 years. The modern renminbi (RMB) is a direct descendant of this ancient currency tradition. The British Pound dates back to around 760 CE, making it the oldest currency in continuous use in Europe, but not globally.
4. Which investment would have performed better from 1997 to 2023?
$1,000 in Amazon stock
$1,000 in gold
$1,000 split evenly between Amazon and gold
$1,000 in a savings account with compound interest
Explanation: This one isn’t even close! $1,000 invested in Amazon in 1997 would be worth over $1.9 million by 2023 (a return of approximately 190,000%). Meanwhile, $1,000 invested in gold in 1997 would be worth around $5,600 (a return of about 460%). While gold is often considered a stable store of value, tech stocks like Amazon have dramatically outperformed traditional safe investments over this period. This demonstrates the power of growth investing, although past performance doesn’t guarantee future results!
5. If you had a penny that doubled in value every day for 30 days, how much would you have on day 30?
$3.00
$300
$30,000
Over $5 million
Explanation: This famous puzzle demonstrates exponential growth. Starting with $0.01 and doubling every day: Day 1: $0.01 Day 10: $5.12 Day 20: $5,242.88 Day 30: $5,368,709.12 This is why compound interest is often called the “eighth wonder of the world” and demonstrates why consistent investing over time can lead to surprisingly large sums through the power of exponential growth.
6. Which costs the U.S. economy more annually?
Credit card fraud and identity theft
Employee theft and fraud
Counterfeit currency
Bank robberies
Explanation: Employee theft costs U.S. businesses approximately $50 billion annually, while credit card fraud typically costs around $10-12 billion. The dramatic difference highlights an important principle in financial security: internal threats often pose a greater risk than external ones. This is why companies invest heavily in internal controls, ethics training, and employee monitoring systems. Bank robberies, which get much more media attention, actually account for less than $30 million in losses annually.
7. In terms of total wealth creation, which has generated more value throughout history?
The entire gold mining industry throughout human history
Apple Inc. since its founding in 1976
They have created approximately equal wealth
The diamond mining industry
Explanation: This is truly remarkable. Apple Inc. reached a market capitalization of over $3 trillion in 2023, which exceeds the estimated value of all gold ever mined throughout human history (approximately $12.5 trillion in total, with only about $2.5-3 trillion in currently available, above-ground stock). This demonstrates how intellectual property and technology can create enormous value in relatively short periods compared to traditional extractive industries that have operated for thousands of years. This shift represents a fundamental change in how wealth is created in modern economies.
8. Which country’s citizens save the highest percentage of their income on average?
Japan
Germany
United States
China
Explanation: China has consistently maintained one of the world’s highest household saving rates, with citizens saving approximately 30-40% of their disposable income. This contrasts sharply with the United States, where the savings rate typically hovers around 5-8%. Japan and Germany, while known for thrift, save around 10-15% on average. China’s high savings rate is attributed to cultural factors, limited social safety nets, and rapid economic growth creating a gap between income growth and consumption habits.

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Understanding Money & Finance

This quiz highlights how our financial intuitions can often lead us astray. From the counterintuitive costs of loans to the surprising power of exponential growth, finance is an area where taking time to analyze and understand the numbers can reveal unexpected truths.

Some key takeaways:

  • Short-term, high-interest loans can be proportionally more expensive than much larger long-term loans
  • The happiness we get from money isn’t always tied to spending more on ourselves
  • Exponential growth creates results that are difficult to intuit without calculation
  • Modern tech companies have created wealth at unprecedented scales and speeds
  • Internal financial threats (like employee theft) often exceed external threats despite receiving less attention

Financial literacy involves questioning our assumptions and being open to surprising revelations about how money works!

Which costs more over time: a $30,000 car loan or a $150,000 mortgage?

  • The mortgage looks larger but might not be the correct answer depending on interest rates and terms!

In behavioral economics, which generally makes people happier?

  • Spending $100 on themselves or spending $50 on someone else? (Research suggests spending on others often brings more happiness)

What currency is considered the oldest continuously used currency still in circulation today?

  • Most people think it’s the British Pound, but there’s a surprise answer

Which investment would have performed better: $1,000 in Amazon stock in 1997 or $1,000 in gold in 1997?

  • The difference is shocking

The “penny paradox”: If you had a penny that doubled in value every day for 30 days, how much would you have?

  • The answer demonstrates exponential growth

Which costs the economy more annually: credit card fraud or employee theft?

  • The answer surprises most people

In terms of overall wealth creation throughout history, which was more profitable: the entire gold mining industry or Apple Inc.?

  • A great comparison of traditional vs. modern wealth

Which country’s citizens save the highest percentage of their income?

  • Not who you might think!

Which typically costs more over the full term of the loan?
✓ Correct answer: A $30,000 car loan at 7% for 5 years
(The car loan costs proportionally more over time when considering the interest-to-principal ratio annually)

According to research in behavioral economics, which spending choice generally produces more happiness?
✓ Correct answer: Spending $50 on someone else
(Research shows spending on others creates more happiness than spending larger amounts on ourselves)

What is considered the oldest continuously used currency still in circulation today?
✓ Correct answer: Chinese Yuan/Renminbi
(Dating back to around 1600 BCE, much older than the British Pound)

Which investment would have performed better from 1997 to 2023?
✓ Correct answer: $1,000 in Amazon stock
($1,000 in Amazon stock would be worth over $1.9 million by 2023, compared to about $5,600 for gold)

If you had a penny that doubled in value every day for 30 days, how much would you have on day 30?
✓ Correct answer: Over $5 million
(The exact amount would be $5,368,709.12, demonstrating exponential growth)

Which costs the U.S. economy more annually?
✓ Correct answer: Employee theft and fraud
(Employee theft costs approximately $50 billion annually vs. $10-12 billion for credit card fraud)

In terms of total wealth creation, which has generated more value throughout history?
✓ Correct answer: Apple Inc. since its founding in 1976
(Apple reached over $3 trillion market cap, exceeding the estimated value of all gold ever mined)

Which country’s citizens save the highest percentage of their income on average?
✓ Correct answer: China
(Chinese citizens save approximately 30-40% of disposable income, much higher than other countries)