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Chapter 8 savings CE
Review for the chapter 8 savings test
| Question | Answer |
|---|---|
| A credit union is a financial institution that serves only businesses with a wide variety of accounts, loans, and other financial services. | False |
| A good way to save successfully is to make saving a regular payment from each paycheck. | True |
| A dividend is not actually a share of a company’s profits. | False |
| When you save, you trade spending now for the ability to spend in the Future. | True |
| Money market accounts usually pay higher interest rates than regular savings accounts. | True |
| Almost all deposits are insured by a federal government agency. | True |
| The more often interest is compounded, the less interest you make. | False |
| Simple interest is earned on just your principal, not on the interest earned previously. | True |
| Many compound interest calculators are available on the Internet. | True |
| The higher the APR, the less income your deposit will earn. | False |
| Financial institutions that offer memberships to people who share a common bond, such as people in a particular profession, company, or labor union, are | credit unions |
| Interest paid annually at the end of the year on the average balance in a savings account is | simple interest |
| If you deposit $200 in an account that pays 6 percent simple interest per year, what would be the balance in your savings account at the end of the first year? | $212 |
| A written promise to pay a debt by a specified date is called a | bond |
| Interest that is paid on the principal and also on previously earned interest, assuming that the interest is left in the account, is called | Compound interest |
| Savings accounts are offered by all savings institutions, a place in which you can deposit money, a way you can earn interest | True |
| Which of the following specializes in lending to consumers who want to buy homes? | savings and loan associations |
| Interest can be compounded annually, semiannually, and quarterly | True |
| If interest at 6 percent is compounded annually on Carlos’ $500 savings account, how much will he have in his account at the end of two years, assuming that he withdraws nothing during the two years? | $561.80 |
| The dollar value printed on a bond is the number of the bond | False |
| Money in savings accounts usually earns _____. | Interest |
| The money you deposit in a savings account, CD, or other savings option is called the _____. | Principle |
| Early withdrawal on a CD is usually subject to a(n) _____. | Penalty |
| Authorizing your employer to deposit a certain amount of each paycheck into your savings is called an automatic payroll _____. | deduction |
| Use the rule of 72 to figure how many years it will take to double your money if you have $750 at 7% interest | 72/7=10.29 |
| Use the rule of 72 to figure how many years it will take to double your money if you have $750 at 9% interest | 72/9= 8 |
| Use the rule of 72 to figure how many years it will take to double your money if you have $750 at 5% interest | 72/5=14.4 |
Created by:
Lhoover