Simple Interest
What formula is used to calculate interest?
Interest = Principal × Rate × Time or I = prt
What is compound interest?
the interest earned on the principal and interest
When you go to open your account, be sure to bring what 4 items?
Picture ID, Social Security number, Money, Parent/Guardian
What is a bank statement?
a list from the bank of all your recent banking transactions
When you make a withdrawal, you plan to:
take money out of your account
Sheryl deposited $600 in a new savings account at BPA Savings and Loan Association. No other deposits or withdrawals were made. After 3 months, the interest was computed at an annual interest rate of 3.5%. How much simple interest did her money earn?
$5.25
Sarah deposited $860 in a new regular savings account that earns 5.5% interest compounded semiannually for 1 year. (a) the amount and (b) the compound interest.
a. $907.95 b. $47.95
_____ is the person to whom the check is written
Payee
What is the monthly fee the bank charges for its services called?
a service charge
What is the annual interest rate?
the percent of the principal you earn as interest based on one year
Sydney deposited $2,430 at 6.75%. She made no other deposits or withdrawals. How much simple interest did she earn in 65 days?
$29.21
Stephen’s savings account has a principal of $1,200. It earns 6% interest compounded quarterly for two quarters. What is the amount they have?
$1,236.27
True/False You do not have to use the current date when writing a check.
False
What does it mean to reconcile your checking account?
to compare your bank statement to your check register and make sure they agree
3. In an annuity due savings plan, money is deposited and starts earning interest:
A. at the end of the year
B. at the end of interest periods
C. at the start of an interest period
C. at the start of an interest period
Megan wants to know how many months it would take for $15,000.00 to earn $618.75 at 5 1/2 % simple interest.
9
Tauna deposited $1,950 in a new credit union savings account on the first of the quarter. The principal earns 4.25% interest compounded quarterly. She made no other deposits or withdrawals. What is the compound interest?
$41.66
What are the 3 types of endorsements?
consist of only the endorser’s name.
makes a check payable to anyone who has the check.
can be used to transfer any check, however, another type of endorsement may be better.
What is a check register?
check register is a separate book, usually the same size as the checkbook, that allows you to maintain a record of the checks written.
What does the bank send you that shows all deposits, withdrawals, and interest?
An account statement
If Mia invests $73,000 at 7 1/2 % annual simple interest on March 1, when will her investment be worth $75,760?
September
Ms. Crawford deposited $2,900 in a new regular savings account that earns 5.5% interest compounded semiannually. She made no other deposits or withdrawals. What was the amount in the account at the end of 1 year?
$3,061.69
What is a certified check?
A certified check is a personal check for which a bank has guaranteed payment. The certification is stamped on the face of the check and is signed or initialed by a bank officer.
What are the 4 types of money orders?
Bank , Postal, Express, Telegraphic
If you make a mistake on a check what should you write on it?
VOID