A savings account set up to pay for unexpected expenses. In this account you should have enough money to cover at least three months worth of expenses.
What is an emergency fund?
100
This is a type of savings account that requires a larger minimum balance than a regular savings account and it usually pays more interest.
What is money market account?
100
How quickly assets can easily be converted into cash.
What is liquidity?
100
When opening a savings account, you should look for what?
What is interest rate, fees, and balance requirements?
100
When purchasing a certificate of deposit (CD), you want to choose a bank that has the _______ interest rates.
What is highest?
200
This is a rule of savings that suggests you pay a specified amount to your savings accounts before you pay any of your bills.
What is pay yourself first?
200
This is a type of savings account that is very liquid and usually pays low interest rates (usually 0.01%).
What is a savings account?
200
Everything in your life that involves money.
What is personal finance?
200
You have ATM access with this particular type of savings account.
What is a regular savings account?
200
You put $100 into a savings account for one year. If interest is compounded quarterly you will make more interest for the year than if it were compounded annually. TRUE/FALSE
What is true?
300
This is a rule of savings that figures out how many years it will take your investment to double at a specified interest rate.
What is rule of 72?
300
An amount of money the bank pays you for the use of your money or in regards to loans, this is the amount of money you must pay back in addition to the amount you borrowed.
What is interest?
300
Of the savings plans we discussed, a _______ carries the highest interest rate.
What is a certificate of deposit (CD)?
300
A certificate of deposit (CD) typically carries a _____ interest rate than a savings account.
What is higher?
300
With an interest rate of 3.1%, how long does it take for your money to double? Remember 72/interest rate.
What is 23.23?
400
When interest is computed on the original principal + accumulated interest. In other words, this type of interest is calculated by earning interest on interest.
What is compound interest?
400
An interest rate that does not change.
What is fixed interest rate?
400
If your interest is compounded quarterly, interest is added to your principal every _______.
What is three months (4 times a year)?
400
If you can take money out of your savings account at any time whenever you like you have an account that has high _________.
What is liquidity?
400
How long will it take the following investments to double? Round answers to TWO DECIMAL PLACES!
Treasury Bill 11.3%
What is 6.37?
500
This is a type of savings account where money is deposited for a specific length of time and collects interest. It is less liquid than savings or money market accounts because you must leave it in this account for a set number of years and it has the highest interest rates.
What is certificate of deposit (CD)?
500
An interest rate that changes.
What is variable interest rate?
500
If your interest is compounded annually, interest is added to your principal every _______.
What is one year?
500
When calculating simple interest, the T is always in years. Even if the question asks you for months you must convert the months into a measure of years. For example, 6 months would equal _____ years.
What is 0.5 years?
500
Use the simple interest formula to find the Interest (I) NOT THE FINAL BALANCE OR TOTAL!
REMEMBER... I = PRT and you must convert your rate to a decimal!
$34,100 at 4% for 3 years