State High-School Students Score Well on 'Financial Literacy' Challenge

The U.S. Department of Education and U.S. Department of the Treasury announced 1,830 Washington students and 53 Washington educators participated in the National Financial Capability Challenge for the 2010-11 school year. The Challenge, which includes a voluntary online exam for high school students, helps teach young Americans about saving, budgeting, investing, and other important skills critical to building a secure financial future.

According to a U.S. Dept. of Education press release, the average score for Washington students on the exam was 71 percent – compared to 69 percent nationally. A total of 449 Washington students scored in the top 20 percent nationally and 16 Washington students received perfect scores. State-by-state results and sample questions from the exam are included below and at www.challenge.treas.gov.

“It's critical for our young people to develop smart financial skills,” said Secretary of Education Arne Duncan. "If we're going to prepare our students for 21st century success, we have to teach them about earning and spending, saving and investing. Otherwise, they're going to learn the hard way: by making mistakes. I'm encouraged to see the steps that teachers and states are taking to make basic financial education a priority and congratulate these students on their great work."

 “Empowering students with the knowledge they need to make good decisions about saving, budgeting, and investing is critical to helping them build secure financial futures,” said Deputy Secretary of the Treasury Neal Wolin. “I want to congratulate these students on their achievements and thank them for serving as examples to their peers about the importance of financial education.”

Example questions from the Challenge’s online exam include the following:

1.      Carolina has $5,000 saved from working at different jobs.  She puts her money in a savings account that pays 4 percent per year in interest. How much money will be in her account at the end of the first year and at the end of the second year?
A.     End of first year: $5,100; end of second year:  $5,400.
B.      End of first year: $5,200; end of second year:  $5,400.
C.      End of first year: $5,200; end of second year:  $5,408.
D.    I don’t know.
(Answer: C)

2.      Marco went to the grocery store to buy a box of cereal.  The type of cereal he liked came in three different brands and three different size boxes.  To select the brand and the box with the lowest unit cost, he should look at the:
A.    largest cereal box on the shelf.
B.     most popular brand of cereal.
C.     price per ounce of cereal in each box.
D.    I don’t know.
(Answer: C)