Business and Marketing
National Credit Union Administration (NCUA)
Insures deposits and credit unions up to $250,000
Compounded + going to have 1 compounding problem
Provides an easy way to calculate compound interest, earnings a different interest rates and times
Earnings
Restrictions and penalties can affect an accounts______
72
To calculate the number of years and with your savings will double, divide ____by the rate of interest
Form 1099-INT
Which form states the total interest earned during tax a year?
A fixed interest rate
Which of the following is necessary to use the rule of 72? A minimum of $5000, a minimum of 25 years, a fixed interest rate, an interest rate of 10% or more
Requires a high minimum balance
Which of the following items is not a characteristic of a passbook savings account? Low interest rate, unlimited, withdraws, requires a high minimum balance, few fees.
Make savings a regular part of your budget
Which of the following strategies will help make your savings grow? Choose accounts with low interest rates, pay yourself only with discretionary money after all bills are paid, make frequent withdrawals, make savings a regular part of your budget.
CD
Which savings product requires a person to commit his or her money for the longest period of time? CD, interest-bearing, savings account, passbook savings account, high-yield savings account.
Taxes
You must pay _____ on the interest earned by your savings
Shorter
______ interests offer more flexibility for depositing and withdrawing money without loss of interest. Simple, longer, variable, shorter.
Passbook savings account
______ savings account use the booklet to record deposits, withdraws, interest, earned, and current balance
Financial security
_______ enables you to afford goods and services you need and want.
savings account
a bank account that earns interest
brokerage firm
a business that specializes in trading stocks
Certificate of Deposit
a certificate issued by a bank to a person depositing money for a specified length of time.
financial security
ability to prepare for future needs and meet current expenses to live comfortably
statement savings account
account similar to a passbook savings account except that the depositor receives a monthly statement showing all transactions
high-yeild savings account
an account that pays a higher interest rate than basic savings account
compound interest
interest earned on both the principal amount and any interest already earned
simple interest
interest paid on the principal alone
tax exempt
not subject to taxes
Future Value
the amount of money in the future that an amount of money today will yield, given prevailing interest rates
Liquidity
the ease with which an asset can be converted into cash
Time value of money
the increase of an amount of money due to earned interest or dividends
Interest-bearing
A _______ savings account pays interest in allows for regular deposits and withdrawals
Higher
A money market account _____ interest rate than regular savings accounts
Pay yourself first
A payroll savings plan (PSP) is another application for which strategy? Pay yourself first, first time value of money, compounding interest, rue of 72.
payroll savings plan (PSP)
A program in which an employee authorizes the employer to make regular deductions from his or her paycheck to automatically deposit in a designated savings plan.
Achievable
A smart goal should be____. Temporary, successful, achievable, mission specific
Savings plan
A strategy for using money to reach important goals into advance. A persons financial security is a _______
8-10 months
How long should your emergency savings cover?
Rule of 72
The number of years it takes for a certain amount to double in value is equal to 72 divided by its annual rate of interest.
Annual percentage yield (APY)
The rate of yearly earnings from an account
Principal
The amount of money originally deposited is called the_____
Interest
The formula for______ is principal x rate x time
Grace period
Some financial institutions offer a______ During which you can receive full earnings on deposits or withdrawals
SMART goal
Specific, Measurable, Attainable, Realistic, Timely
Tax-deffered
The money that is not taxed until withdrawn from an account
