Personal Finance: Savings Review

How much would Keith have in his account after three years if he started with $200 and earns 2 percent interest, compounding annually?

$212.24

The amount of interest you will earn in one year from a savings account is the _____.

Annual Percentage Yield (APY)

True or False? Annual compounding pays more money than daily compounding.

False

Why does the money in a savings account grow?

It earns interest, plus it earns interest on the interest.

Jack wants to be better at saving his money. Name five or more tips you could suggest to help him save.

Open a savings account Put money into a savings account and keep track of it Don't waste your money one inpluse decisions Ask your self this " is it really worth it" Keep your receipts of the stuff you buy

The original amount of money you deposit in a savings account is _____.

Principal

True or False? Interest that is compounded semi-annually is compounded twice a year.

True

Why would someone purchase a savings bond?

no taxes safe easy to buy matched deposits great as gifts good for the United States government

Why is it is important to save?

to reach your goals to help manage your money to be prepared in case of emergency to be ready for an unforeseen expense to improve your standard of living

Madison has an account that pays different interest rates depending how much she has in her account. This type of interest rate is called a _____.

variable interest rate