Banking
Saving- Compound interest
Saving Tools
Checking
Spending Plans
100
What is a Credit Union?
Not-for-profit depsoitory institution owned by their customers
100
What is an asset? Liability?
Asset--anything of value that one owns Liability--anything one owes money on
100
What is a savings account? Does it usually earn interest?
An account used to hold money not spent on current consumption. Usually used as a money storage place and not for daily use. It may earn a small amount of interest.
100
What type of account is known as a transaction account?
Checking Account
100
A monthly rent payment is an example of a(n) ______________ expense.
Fixed A fixed expense does not change each month.
200
What is a commercial bank?
For-profit despository insitution that offer numerous financial services
200
How do interest rates affect the time value of money?
The higher the interest rate, the larger the return.
200
Why are savings tools secure?
They are backed by government insurance.
200
What type of fee are you changed if you spend more money than you have in your checking account?
Overdraft fee
200
A monthly water bill is an example of a(n) ______________ expense.
Variable A variable expense may change each month.
300
What is the FDIC and what is it's purpose?
Federal Deposit Insurance Corporation It protects depositors up to $250,000 per account.
300
What is the Rule of 72?
It is how long it will take to double your investment given a certain interest rate.
300
What is the difference between a CD and a savings bond?
CD--Interest earning savings tool that allows restricted access to funds. Time periods usually range from a few days to a few years. Savings bond--Similar to a loan; We buy for 50% of face value and then receive money only when it reaches full value.
300
How often should you balance (reconcile) your checkbook?
Monthly.
300
What percentage do experts recommend you save?
Save a minimum of 10%
400
What is another name for a checking account?
Draft account or transaction account (Because it is used for majority of transactions)
400
Jan invests $3000 at a rate of 10%. How long will it take for her money to double?
Use the Rule of 72 72/10=7.2 Years
400
Rank the following in order from MOST liquid to LEAST liquid. Saving Account Money Market Deposit Account Savings Bond Checking Account Certificate of Deposit
Checking Account Saving Account Money Market Deposit Account Certificate of Deposit Savings Bond
400
When using a debit card, when is the amount spent deducted from your checking account?
The amount spent is immediately deducted from her account.
400
What percentage do experts recommend you spend on housing?
Maximum 30%
500
What is the difference between interest and interest rate?
Interest--Price paid for using someone else's money Interest Rate--Percentage rate used to calculate interest (
500
What is the difference between savings and investing?
Savings--Portion of current income not spent on consumption Investing--Purchase of assets with the goal of increasing future income
500
Rank the following in order from HIGHEST Interest to LOWEST Interest. Saving Account Money Market Deposit Account Savings Bond Checking Account Certificate of Deposit
Savings Bond Certificate of Deposit Money Market Deposit Account Saving Account Checking Account
500
The numbers listed at the bottom of a check are the _______ number and the _______ number.
Routing and account number
500
Give an example of two controls systems discussed in-class
Envelope System Online Money Managment (mint.com)
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