Simple/Compound Interest
Earning Interest on Interest is called _________
Compound Interest
How much should you save in your Emergency fund?
3-6 months of expenses
Money set aside for unanticipated expenses or loss of income
emergency fund
What type of account is used to keep money for later?
Savings Account
If you see any errors on your bank statement, you should contact ________ immediately.
the bank
The following formula is for calculating what type of interest
i=P x R x T
simple interest
What is each category of the 50-30-20 budgeting rule?
50%-Needs
30%-Wants
20%-Savings
What is the rise in general price levels of goods and services over a period of time?
inflation
When you make a purchase using your debit card, which account does the money come out from?
Checking Account
overdraft protection
Ashley borrows $400 from her friend, who has agreed to charge her a monthly simple interest rate of 2.3%. Ashley pays her friend back in 8 months. How much interest will she pay her friend? (round to 2 decimal places)
$73.60
interest= principal x rate x time
400x.023x8=73.60
If you do not have overdraft protection your card will be __________
declined
A loan banks offer to their customers when they try to withdraw more funds than they have in their account.
Overdraft Protection
What is it called when your employer sends your paycheck electronically to your bank?
Direct Deposit
What is it called when you use most or all of your monthly income to cover expenses?
living paycheck to paycheck
Sam put $12,000 into her checking account. They pay her an interest rate of 1.6% that is compound monthly. What will her balance be after 1 year?
$14,517.96
total balance= principal x (1+rate)time
12,000 x (1+0.016)12
Amy has a bank account and did NOT sign up for overdraft protection that has a $20 fee charged for each transaction that exceeds the available balance. She has $100 in her checking account. Amy has transactions for the following amounts: $10, $50, $25, $30, $45, $65
At what transaction will Amy's card be declined?
Transaction 4 for $30
What is a card with a spending limit, that is loaded with a balance ahead of time?
Prepaid Card
Which account ebbs and flows with expenses and income?
checking account
When inflation is high the money in your savings account will have ___________ purchasing power
less
Gabe has a debt on his credit card of $1,500. He is trying to pay it off in 7 months. The credit card company charges 11% interest that is compound monthly. How much interest will he owe after 7 months? (round to 2 decimal places).
$1,614.24
total balance= principal x (1+rate)time
1,500x(1+.11)7=3,114.24
3,114.24-1,500=1,614.24
You have the following monthly expenses:
Rent............. $1,500
Eating Out.... $150
Cell Phone.... $75
Hulu............ $25
Groceries..... $400
Insurance.... $120
How much should you save for your Emergency Fund if you want to save 6 months of expenses?
$12,570
1,500+75+400+120=2,095 per month
2,095 x 6=12,570
*remember to only count essential expenses
Someone with little or no access to a bank would be considered__________
unbanked/underbanked
What are you charged when you borrow money from a bank?
interest
Tom has a bank account WITH overdraft protection that has a $35 fee charged for each transaction that exceeds the available balance. He has $200 in his checking account. Tom has transactions for the following amounts: $25, $70, $15, $80, $25, $45, $5
How much will Tom pay in overdraft fees?
$105