Category Archives: Question of the Day

Which Account Would You Choose?

Thanks to my colleague, Jessica, for letting me know about this phenomenon of a 10 year CD with an interest rate below a regular savings account.  So, the question for your students is this:

Suppose you had $500 that you didn’t think you would need for a long time.  Would you invest in a 10-year CD earning 0.90% or a regular savings account earning 0.75% interest?

Some good points for a discussion: Continue reading

Do People Shop Around For Car Insurance?

Answer:  Over 1/3 of consumers say they don’t shop around for car insurance (despite the gecko imploring us to do so and car insurance companies spending billions to persuade us to switch!)

From Forbes:

A recent survey conducted for insuranceQuotes.com determined that the average U.S. driver has not changed insurance companies in 12 years, with about a quarter of them staying with the same carrier for more than 16 years. Thirty percent of drivers say they compare quotes every few years, while a stunning 36 percent never bother to look for the best rates.

As for who is least likely to switch…

The survey found that millennials and senior citizens are the least likely among all demographic groups to shop around for auto insurance. What’s more, 46 percent of motorists in the U.S. confessed to not knowing they can change their auto insurance carriers at any time. “Even if you paid for six months or a year of insurance upfront, the company will reimburse you if you choose to switch,” explains Adams.

Why do your students think people may be so hesitant to shop around?

How Much Do Americans Pay In Interest On Their Debt?

This chart released quarterly by the Federal Reserve presents several learning opportunities:

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Lesson 1: Mortgage debt far exceeds all other consumer debts with a total of $8.12 trillion as of the end of Q2 2015. The next closest, student loan debt, stood at $1.19 trillion or almost 1/8 the amount of mortgage debt. Continue reading