Word Up (Vocabulary)
The initial deposit amount
Principal
In the formula I=Prt, the "I" represents this
Interest
This is the value of "n" when interest is compounded daily.
365
This account has the lowest interest rate, especially if you do business with a traditional brick-and-mortar bank.
a regular savings account
The receiver of the transferred funds or the person to whom the check is written
payee
The money earned by the principal amount
Interest
In the simple interest formula, r must be expressed as a
decimal
The question mark in this equation A=P(1+r/n)^n?
t, time
This account is a hybrid of a checking and a savings account.
a money market account
What you write on a check when you make a major mistake?
VOID
Interest earning interest
Compound Interest
In the simple interest formula, the "t" is expressed in
years
In the formula A=P(1+r/n)^nt, A determines this value
ending balance
his account has a term requirement but earns the highest rate for longer terms
CD (certificate of deposit)
A 5-year CD
An online savings account
A money market account
Which one would most likely have the highest interest rate?
5-year CD
Principal plus interest
Marco loans out $200 to his friend, charges 10% in interest and gives the friend 6 months to pay him back. This is the amount Marco earns using the simple interest formula.
$10
Does the amount of interest earned each year increase, decrease, or stay the same in a compounded interest account?
Increase
These two accounts are liquid which are great as emergency funds
a regular savings & a money market account
A traditional bank
A credit union
An online bank
Who is likely to have the highest interest rate on a savings account?
an online bank
The compound interest formula is an example of this algebraic function
exponential function
Jodie deposits $6,000. Her balance is $6,150 five years later. This is the interest rate she’s earning under a simple interest formula.
0.5%
Jordan deposits $3000 into a 36-month CD that is compounded daily and earns 0.8% interest. This is Jordan's ending balance.
$3,072.87
The time when a certificate of deposit (CD) can be withdrawn without a fee or penalty
maturity date
Your deposit into a savings account, a CD, or money market account is covered for up to $250,000 by this agency
FDIC
(Federal Deposit Insurance Corporation)