Review for the chapter 8 savings test
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| A credit union is a financial institution that serves only businesses with a wide variety of accounts, loans, and other financial services. | False
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| A good way to save successfully is to make saving a regular payment from each paycheck. | True
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| A dividend is not actually a share of a company’s profits. | False
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| When you save, you trade spending now for the ability to spend in the Future. | True
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| Money market accounts usually pay higher interest rates than regular savings accounts. | True
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| Almost all deposits are insured by a federal government agency. | True
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| The more often interest is compounded, the less interest you make. | False
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| Simple interest is earned on just your principal, not on the interest earned previously. | True
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| Many compound interest calculators are available on the Internet. | True
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| The higher the APR, the less income your deposit will earn. | False
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| 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
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| Interest paid annually at the end of the year on the average balance in a savings account is | simple interest
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| 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
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| A written promise to pay a debt by a specified date is called a | bond
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| 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
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| Savings accounts are offered by all savings institutions, a place in which you can deposit money, a way you can earn interest | True
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| Which of the following specializes in lending to consumers who want to buy homes? | savings and loan associations
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| Interest can be compounded annually, semiannually, and quarterly | True
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| 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
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| The dollar value printed on a bond is the number of the bond | False
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| Money in savings accounts usually earns _____. | Interest
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| The money you deposit in a savings account, CD, or other savings option is called the _____. | Principle
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| Early withdrawal on a CD is usually subject to a(n) _____. | Penalty
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| Authorizing your employer to deposit a certain amount of each paycheck into your savings is called an automatic payroll _____. | deduction
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| 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
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| 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
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| 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
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