Can you figure out the amount of money you would owe on your loan after one year of interest? If not, you are part of about two-thirds of Americans who can’t pass a basic test of financial literacy.
The National Capability Study, conducted by the FINRA Foundation, surveyed 27,564 Americans, from June through October of last year, according to an article by Madaline Farber for Time. FINRA is a quasi-government organization that regulates brokers and Wall Street.
From the article:
Bonds presented one of the biggest problems for respondents of the survey. Just 28% knew what happens to bond prices when interest rates fall. (They rise.) And less than half of all Americans appear to be able to answer basic questions about financial risk.
In fact, more Americans failed the test today than in 2009, according to the article. While 37% of Americans could pass the test this time around, in 2009, 42% could pass it.
This inability to pass a simple financial test is despite the Consumer Financial Protection Bureau’s attempts to educate homebuyers.