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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

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