Complete Practice Test for Principles of Finance DECA Competition

Financial concepts, money management, and financial literacy exercises for grade 3 students preparing for DECA competition.

Practice Test Overview
PRINCIPLES OF FINANCE DECA PRACTICE TEST
Test Instructions:

• Read each question carefully before answering

• Show all your work in the space provided

• Remember: 100¢ = $1.00

• Always write the correct units in your answers

• Time allowed: 45 minutes

• Total points: 100

Core Concepts and Definitions

Finance: The management of money, including investing, borrowing, lending, budgeting, and saving.

Money: Currency used for buying goods and services. In US, we use dollars ($).

Budget: A plan for how to spend money over a specific period.

Saving: Setting aside money for future use.

Spending: Using money to purchase goods or services.

Earning: Receiving money through work, allowance, or other activities.

Income = Earnings - Expenses
Basic Financial Equation
Earning
Income
Money received
Spending
Expenses
Money used
Saving
Savings
Money kept
Step-by-Step Methodology:
  1. Read the problem: Understand what's being asked
  2. Identify amounts: Find all dollar and cent values
  3. Choose operation: Addition, subtraction, multiplication, or division
  4. Solve: Calculate the answer
  5. Check: Make sure your answer makes sense
Tip 1: Always write the dollar sign ($) or cent symbol (¢).
Tip 2: Convert cents to dollars: 100¢ = $1.00.
Tip 3: Use a number line for adding/subtracting money.
Tip 4: Estimate first to check if your answer is reasonable.
Practice Questions: Part A (Questions 1-3)
1 Budgeting Question 20 pts
Question:
Emma receives $12 as allowance each week. She spends $4 on snacks and saves the rest. How much does she save in 5 weeks?
Key Concepts:

Budget: Income - Expenses = Savings

Work Space:

Weekly income: $12

Weekly expense: $4

Weekly savings: $12 - $4 = $____

Total savings in 5 weeks: $____ × 5 = $____

Solution Steps:
  1. Calculate weekly savings: $12 - $4 = $8
  2. Calculate savings over 5 weeks: $8 × 5 = $40
  3. Verify: $4 × 5 = $20 spent, $40 saved, $20 + $40 = $60 earned
Weekly Income
$12
Weekly Expense
$4
Weekly Savings
$8
Step 1: Calculate weekly savings

Weekly savings = Income - Expenses = $12 - $4 = $8

Step 2: Calculate total savings

Total savings = Weekly savings × Number of weeks = $8 × 5 = $40

Step 3: Verify the answer

Spent: $4 × 5 = $20, Saved: $40, Total: $20 + $40 = $60

Earned: $12 × 5 = $60 ✓

Emma saves $40 in 5 weeks
Final Answer:

Emma saves $40 in 5 weeks.

Scoring:

• Correct weekly savings: 8 pts

• Correct total calculation: 8 pts

• Correct answer: 4 pts

2 Making Change Question 25 pts
Question:
Tom buys a toy for $6.25 and pays with a $10 bill. How much change should he receive?
Key Concepts:

Change: Amount paid - Cost of items = Change

Work Space:

Amount paid: $10.00

Item cost: $6.25

Change: $10.00 - $6.25 = $____

Amount Paid
$10.00
Item Cost
$6.25
Change
$3.75
Step 1: Align decimal points

$10.00 - $6.25

Step 2: Subtract cents

0¢ - 25¢ = Need to borrow: 100¢ - 25¢ = 75¢

Step 3: Subtract dollars

$9 - $6 = $3

Step 4: Combine results

$3 + 75¢ = $3.75

Step 5: Verify calculation

$6.25 + $3.75 = $10.00 ✓

Change = $3.75
Final Answer:

Tom should receive $3.75 in change.

Scoring:

• Correct setup: 8 pts

• Correct calculation: 12 pts

• Correct answer: 5 pts

3 Financial Planning Question 25 pts
Question:
Sarah wants to buy a bike that costs $90. She already has $35 saved and earns $5 per week from her allowance. How many weeks will it take her to save enough money?
Key Concepts:

Financial Goal: Something you want to save money for, like a toy or game.

Work Space:

Goal: $90

Already saved: $35

Amount needed: $90 - $35 = $____

Weekly earnings: $5

Weeks needed: $____ ÷ $5 = ____ weeks

Goal
$90
Already Saved
$35
Weekly Earnings
$5
Step 1: Calculate amount needed

Amount needed = Goal - Already saved = $90 - $35 = $55

Step 2: Calculate number of weeks

Weeks needed = Amount needed ÷ Weekly earnings = $55 ÷ $5 = 11 weeks

Step 3: Verify calculation

$35 + ($5 × 11) = $35 + $55 = $90 ✓

11 weeks needed
Final Answer:

Sarah needs 11 weeks to save enough money for the bike.

Scoring:

• Correct amount needed: 10 pts

• Correct division: 10 pts

• Correct answer: 5 pts

Practice Questions: Part B (Questions 4-5)
4 Financial Decision Making 30 pts
Question:
Store A sells juice for $2.75 per bottle. Store B sells the same juice for $2.10 per bottle. If you buy 6 bottles, how much would you save by shopping at Store B?
Key Concepts:

Comparison Shopping: Finding the best deal by comparing prices at different stores.

Work Space:

Store A cost: $2.75 × 6 = $____

Store B cost: $2.10 × 6 = $____

Savings: $____ - $____ = $____

Store A Cost
$16.50
Store B Cost
$12.60
Savings
$3.90
Step 1: Calculate cost at Store A

Store A: $2.75 × 6 = $16.50

Step 2: Calculate cost at Store B

Store B: $2.10 × 6 = $12.60

Step 3: Find the difference

Savings = $16.50 - $12.60 = $3.90

Step 4: Verify calculation

$12.60 + $3.90 = $16.50 ✓

Savings = $3.90
Final Answer:

You would save $3.90 by shopping at Store B.

Scoring:

• Store A calculation: 12 pts

• Store B calculation: 12 pts

• Correct savings: 6 pts

5 Money Management 30 pts
Question:
Maya earned $18 from doing chores, $12 from helping neighbors, and $7 from selling old toys. She spent $15 on books and $9 on games. How much money does she have left?
Key Concepts:

Income Tracking: Recording all money received.

Expense Tracking: Recording all money spent.

Work Space:

Total income: $18 + $12 + $7 = $____

Total expenses: $15 + $9 = $____

Money left: $____ - $____ = $____

Total Income
$37
Total Expenses
$24
Money Left
$13
Step 1: Calculate total income

Total income = $18 + $12 + $7 = $37

Step 2: Calculate total expenses

Total expenses = $15 + $9 = $24

Step 3: Calculate money left

Money left = Income - Expenses = $37 - $24 = $13

Step 4: Verify calculation

$24 + $13 = $37 ✓

Money left = $13
Final Answer:

Maya has $13 left.

Scoring:

• Correct income calculation: 12 pts

• Correct expense calculation: 12 pts

• Correct final answer: 6 pts

Questions & Answers

Question: What is DECA and why is it important for learning finance?

Answer: DECA stands for Distributive Educational Clubs of America. It's an organization that prepares emerging leaders and entrepreneurs in marketing, finance, hospitality, and management. DECA is important for learning finance because it:

  • Teaches real-world financial skills
  • Develops critical thinking abilities
  • Builds confidence in financial decision-making
  • Provides opportunities to apply finance knowledge practically
  • Prepares students for future financial success

Question: How can I help my child prepare for the principles of finance DECA practice test?

Answer: Here are effective ways to help your child prepare:

  • Practice money-related word problems regularly
  • Use real money for hands-on learning experiences
  • Create budgeting scenarios with actual prices
  • Encourage your child to keep a simple savings log
  • Take practice exams to build familiarity with test format
  • Review financial concepts regularly to reinforce learning

Make learning engaging and connect concepts to real-life situations!

Question: What are the most important finance concepts I should focus on for the DECA exam?

Answer: Focus on these key concepts for the DECA exam:

  • Money Identification: Know the value of different coins and bills
  • Counting Money: Add up different denominations accurately
  • Basic Operations: Adding, subtracting, multiplying, and dividing money amounts
  • Word Problems: Understanding financial scenarios in story form
  • Budgeting: Planning income, expenses, and savings
  • Financial Planning: Setting goals and creating plans to achieve them

Practice each concept regularly and work on real-world applications!