FINN #2

Cho is 24 years old, and her current gross monthly income is $3,800. Given an average personal tax rate of 32% for her federal, state, and local taxes, Cho's net monthly income is ________. If she follows the advice of financial experts, what is the maximum amount that she should spend to purchase a new vehicle? (Note: Round your answers to the nearest whole dollar.) a. $1,034 b. $1,550 c. $517

$2,584 c. $517

Suppose that Sean received an inheritance from his grandmother last month. This boosted the normal balance of Sean's savings account to its current balance of $278,500. Sean is the sole owner of the account. The maximum amount of coverage that would be provided if his bank failed tomorrow is _________.

$250,000

Funds invested in this account allow you to conduct all financial business with a single organization.

AMA

Which of the following will lead to a poor credit rating?

Applying for a long-term loan and occasionally being late with a payment

In an arrangement that seems inconsistent, mutual savings banks are insured by the ______.

BIF

_______ is a reason that people use credit.

Being able to meet a financial emergency

Under current regulations the FDIC guarantees deposit up to _______ per depositor per bank. A. Unlimited (i.e. 100% of deposits are guaranteed) B. $100,000 C. $250,000 D. $500,000

C. $250,000

A wage earner (bankruptcy) plan is sometimes called: A. Chapter 7 Bankruptcy B. Chapter 11 Bankruptcy C. Chapter 13 Bankruptcy D. No such thing

C. Chapter 13 bankruptcy

Where one selects a shorter maturity (or term) loan, A. the monthly payment goes up. B. the monthly payment goes down. C. the total interest paid over the life of the loan goes down. D. Both A and C are correct.

C. the total interest paid over the life of the loan goes down

Which of the following statements about the cash advances that the holder of a bank credit card can obtain from participating banks is true?

Cash advances obtained from the teller window at a bank are limited by the unused credit in the borrower's account

Assume you are renting now and monthly: -Cash inflows = $4,900-Cash outflow = $3,650 (of which rent is $650)-You want to continue saving at least 10% of inflow and have another $200 per month as "cushion" for emergencies. How much of a monthly mortgage loan payment plus property taxes plus insurance (PITI) can you afford without cutting other expenses? Note: P = principal; I = interest; T = taxes (real estate); I = insurance (HO) A. $1,390 B. $1,470 C. $1,050 D. $1,210

D. $1,210

Which of the following is a depository financial institution? A. Investment Bank B. Finance Bank C. Securities Firm D. Credit Union

D. Credit Union

Bankruptcy does not permit one to discharge: A. No-interest loans from family members B. Alimony payments C. Child support payments D. Certain (most) tax payments E. B & C F. B, C, & D G. All of the above

F. B, C, & D

All credit cards have annual fees. T/F?

False

Extremely low interest rates favor investors and boost the incentive to save. T/F?

False

Fixed-rate loans are desirable if interest rates are expected to fall over the course of the loan. a. True b. False

False

In a co-op, the buyer receives title to a unit and joint ownership of the common areas. T/F?

False

Low interest rates create economic distortions, especially when real, inflation-adjusted interest rates are positive. T/F?

False

Negotiable order of withdrawal (NOW) accounts manage and administer the investments in a trust account or from an estate. T/F?

False

The job of a mortgage banker is to locate conventional loans for clients. T/F?

False

Using credit is the ideal way to meet basic living expenses. T/F?

False

You can borrow, repay, and reborrow from a home equity loan in the same way as you can from a home equity credit line. a. True b. False

False

Funds invested in this account are protected by government-sponsored deposit insurance programs.

MMDA and NOW

Your good friend Poornima received an inheritance from a distant relative. Poornima asks your advice about interest-paying checking accounts. She wants to have access to the money market funds via an ATM. In which account should Poornima not invest?

MMMF

In contrast, funds held in federally chartered credit unions are insured by the ________.

NCUSIF

Nancy's take-home income is $3,000 per month, and she currently has a $700 monthly consumer debt. Which of the following statements applies to Nancy's ability to handle additional debt?

Nancy cannot take on additional consumer debt because her debt safety ratio is higher than the lenders' guidelines

Which of the following is usually excluded from a monthly credit card statement?

The type of goods purchased

sales contract

This agreement, which is used to purchase a car, details the offering price and all conditions of the offer; when the buyer and seller sign it, it establishes the terms of the legally binding transaction.

A chattel mortgage is an instrument that gives lenders title to movable personal property in the event of default. a. True b. False

True

Credit should not be consistently used for purchasing nondurable goods. T/F?

True

Deprecation of one's car is an operating expense. T/F?

True

If you initiated the telephone call, it is okay to give your credit card account number when ordering or purchasing from major catalog houses, airlines, hotels, and so on. T/F?

True

Interest earned for a period should be added to the ending balance shown in your checkbook while reconciling your account. T/F?

True

It is legal for a lender to charge a prepayment penalty. a. True b. False

True

Keeping valuables in a safe-deposit box may reduce your homeowner's insurance premium by eliminating the "riders" that are often needed to cover such items. T/F?

True

Lenders use the guideline that a borrower's monthly repayment burden should not be more than 20% of the borrowers take-home income. T/F?

True

Lowballing is a sales technique where the salesperson quotes a low price for a car to get you to make an offer, and negotiates the price upward prior to signing the sales agreement. T/F?

True

Parent Loans for Undergraduate Students (PLUS) loans are made to the parents or legal guardians rather than to the students. a. True b. False

True

Suppose that Bob currently holds a checking account balance of $3,125 in the commercial bank down the street. His is the only owner of the account. If the bank failed this afternoon, the maximum amount of coverage that would be provided by the Bank Insurance Fund is $3,125. This statement is:

True

Which of the following are the factors that should be considered when identifying appropriate savings vehicles? Check all that apply. a. The level of past interest rates b. The level of current and anticipated interest rates c. Your attitudes toward risk

a and b

If you wanted to purchase ownership interests in diversified portfolios of investments, which type of financial product provider should you contact?

a mutual fund

rebate

a partial refund of a car's purchase price that is given as an inducement to purchase.

What would have been the balance in Kevin's account if his parents had waited until his 10th birthday to make their initial deposit into the same account? a. $29,145 b. $62,923 c. $58,262 d. $125,000

a. $29,145

Mary has calculated her adjusted balance as $500. She notices that her bank's service charges are $20 for this period. Mary's ending balance in her bank account is: a. $480. b. $600. c. $500. d. $520. e. $510.

a. $480

On Kevin's first birthday, his parents deposited $12,500 into a savings account that earns a fixed rate of 8.00% and compounds interest annually. How much money will Kevin's account have accumulated by his 21st birthday? (Hint: Round your answer to the nearest dollar.) a. $58,262 b. $125,000 c. $62,923 d. $29,145

a. $58,262

If Kevin's parents wanted to accumulate an account balance of $35,000 by his 21st birthday, then how much should they have placed on deposit on his first birthday? a. $7,509 b. $3,500 c. $15,011 d. $6,953

a. $7,509

Which of the following statements regarding loan collateral is true? a. Collateral is an item of value used to secure the interest portion of a loan. b. Collateral is always required by banks to lend to customers with good credit ratings. c. Loans secured by collateral always have higher finance charges than unsecured loans. d. Collateral is an item of value used to secure the principal portion of a loan. e. Loans are secured by collateral that is readily marketable at a price high enough to cover the interest portion of the loan.

a. Collateral is an item of value used to secure the interest portion of a loan.

Which of the following statements regarding consumer finance companies is true? a. Consumer finance companies make secured and unsecured loans to qualified individuals. b. Consumer finance companies make loans of any size to low-risk borrowers. c. Consumer finance companies accept deposits and give small loans to their members. d. Consumer finance companies offer consumer loans only for home mortgage lending. e. Consumer finance companies offer consumer loans at the lowest interest rates.

a. Consumer finance companies make secured and unsecured loans to qualified individuals.

Several financial or economic factors are relevant to the rent-or-buy decision. From the following list, identify the financial or economic factors that should be considered when performing this analysis. Check all that apply. a. Current and expected future housing prices b. Whether you want to deal with the repairs and maintenance of the home c. The pride that comes from owning your own home

a. Current and expected future housing prices

However, she could upgrade to a more expensive model by undertaking several activities. Which of the following activities would allow this upgrade? Check all that apply. a. Take a better-paying job or another, or part-time, job that would give her the additional income to support a larger monthly payment b. Purchase the more expensive car now and then ask her boss for a raise next week c. Purchase the more expensive car now and figure out later how to pay for it d. Purchase an upgraded vehicle with fewer and less expensive options

a. Take a better-paying job or another, or part-time, job that would give her the additional income to support a larger monthly payment

Which of the following statements are true, if any. Check all that apply. a. The primary business focus of savings and loan associations is collecting funds by accepting deposits and making residential and consumer loans. b. All four types of institutions—commercial banks, savings and loan associations, credit unions, and mutual savings banks—can carry deposit insurance to protect their depositors. c. All four types of institutions—commercial banks, savings and loan associations, credit unions, and mutual savings banks—pay the same rate of interest.

a. The primary business focus of savings and loan associations is collecting funds by accepting deposits and making residential and consumer loans.

When doing an account reconciliation, interest earned on your account should be: a. added to your checkbook ledger. b. listed as outstanding. c. ignored because the bank has already recorded it. d. treated like a loan. e. deducted from your checkbook ledger.

a. added to your checkbook ledger

The advantage of this saving strategy is that it a. ensures that funds will be saved—as opposed to saving only if sufficient funds remain after all other bills are paid and any impulse purchases are made. b. ensures that funds remaining after paying all bills and making impulse purchases will be saved.

a. ensures that funds will be saved—as opposed to saving only if sufficient funds remain after all other bills are paid and any impulse purchases are made.

A legal claim that allows creditors to liquidate loan collateral is a: a. lien. b. loan application. c. loan rollover. d. note. e. security claim.

a. lien

What is the purpose of an emergency living expense savings fund, and what other sources of funds are sometimes used to address these needs? This fund allows you to cover a household's a. living expenses in the event of a job layoff, illness, injury, or the premature death of an income-generating member of the household. b. expenses incurred during vacations, holidays, and birthday celebrations.

a. living expenses in the event of a job layoff, illness, injury, or the premature death of an income-generating member of the household.

A(n) _____ is traditionally a non-interest-paying demand deposit account. a. regular checking account b. negotiable order of withdrawal (NOW)account c. asset management account d. money market deposit account e. money market mutual fund

a. regular checking account

A loan rollover means that: a. the loan is paid off by taking out another loan. b. the interest on the new loan is lower than the previous loan. c. the loan is repaid without any defaults in payments. d. the maturity period of the new loan is longer than the maturity period of the original loan. e. the new loan will not have any processing fees.

a. the loan is paid off by taking out another loan.

Depository institutions are required to _________ and _________, although the general terms used to describe these financial products may vary across the various types of institutions. Non-depository institutions, in contrast, accept cash contributions from their customers, but the cash inflows are not called _________; instead, they're called shares or premiums.

accept deposits make loans deposits

Which of the following are examples of an interest-earning checking account? Check all that apply. a. Negotiable order of withdrawal (NOW) account b. Regular checking account c. Share draft account

all of the above

A straight bankruptcy:

allows a debtor to retain some other personal assets as per federal regulations

The FICO credit scoring system assigns points according to:

amounts owed

lease

an arrangement wherein the lessee receives the use of an item, such as a car or a house, in exchange for scheduled payments for a fixed period of time.

Mike has a MasterCard with an annual fee of $25, an 18% interest, and a $1,000 credit limit. He always pays the total outstanding balance monthly. His most recent monthly statement lists the previous month's payment, new charges in the current month totaling $1,500, and a $30 fee. The fee is most likely the result of:

an over-the-limit fee

A behavioral bias in which an individual tends to allow an initial estimate (of value or price) to dominate the subsequent assessment (of value or price) regardless of new information to the contrary is called _____.

anchoring

The annual percentage rate (APR) on a single-payment loan of $1,000 at a simple interest rate of 12% is: a. 24%. b. 12%. c. 10%. d. 18%. e. 15%.

b. 12%

Buyers and Seller sign a house contract, with Buyers giving a $2,000 earnest money deposit. The week before closing, Buyers research the school district and decide it's really not good enough for them or their children. Buyers elect to back out of the deal and refuse to close. Because the school district is not what they expected or wanted, Buyers will get a refund of their deposit. A. True B. False

b. False

Some checking accounts pay interest while some don't. You could open a checking account as an individual or you could open a join account with another person. Based on your understanding of individual and joint accounts, identify which of the following statements is correct? a. Individual accounts have an advantage over joint accounts because they pay higher interest. b. Joint accounts have an advantage over individual account because of lower service charges

b. Joint accounts have an advantage over individual account because of lower service charges

Consumer finance companies: a. are managed by large manufacturing companies. b. charge rates that are regulated by the states where they do business. c. are cooperative financial institutions that are owned by their members. d. are non-profit financial institutions. e. accept deposits from their members and use the deposits for lending.

b. charge rates that are regulated by the states where they do business

In account reconciliation, one of the steps in calculating the adjusted bank balance is: a. deducting total deposits still outstanding from the bank balance. b. deducting total withdrawals still outstanding from the bank balance. c. subtracting interest paid on the account's balance for the period. d. adding bank service charges to the bank balance. e. adding the total credit card outstanding balance to the bank balance.

b. deducting total withdrawals still outstanding from the bank balance.

One way to pay yourself first is to a. make your savings contribution only if you have something left over after you pay all of your other bills. b. have your savings contribution automatically withheld from your paycheck and directly deposited into your savings account.

b. have your savings contribution automatically withheld from your paycheck and directly deposited into your savings account.

Most loans made by savings and loan associations are: a. home improvement loans. b. mortgage loans. c. auto loans. d. education loans. e. consolidation loans.

b. mortgage loans

If the add-on method is used to calculate a finance charge of $150.80 on a $2,200 loan, the amount to be: a. disbursed to the borrower is $150.80. b. repaid is $2,350.80. c. repaid is $2,200. d. disbursed to the borrower is $2,350.80. e. disbursed to the borrower is $2,049.20.

b. repaid is $2,350.80

What do you think it means to pay yourself first? It means making your saving activities your first priority by paying yourself, or making contributions to your savings accounts _______ you pay any other obligations.

before

How should you decide whether to buy or to lease a vehicle? Check all that apply. a. Accept the financing alternative suggested by the dealer. b. Accept the financing alternative suggested by your friends. c. Use a lease-versus-purchase worksheet to identify and compare the total costs of leasing and purchasing and select the method that minimizes both your total cash outlay and your opportunity costs. d. Relate the advantages and disadvantages of leasing and purchasing to your personal situation and decide which financing alternative is better for you at the current time.

c and d

Which of the following formulas would you choose to calculate the future balance on an account that earns compound interest? a. FV=(PV×i)^n b. FV=PV^n × (1+i) c. FV=PV× (1 + i)^n d. FV=PV× (1+i) × t

c. FV = PV x (1+i)^n

______ offer banking services but do not accept deposits like traditional banks. a. Stock brokerage firms b. Mutual funds c. Nonprofit organizations d. Credit bureaus e. Nondepository institutions

c. Nondepository institutions

Which of the following statements regarding loan maturity is true? a. The shorter the loan maturity, the higher the total cost of borrowing. b. The longer the loan maturity, the higher the monthly payments. c. The longer the loan maturity, the higher the amount of interest paid. d. The shorter the loan maturity, the lower the monthly payments. e. The longer the loan maturity, the lower the total cost of borrowing.

c. The longer the loan maturity, the higher the amount of interest paid.

Which of the following statements regarding credit unions is true? a. They are owned and managed by the government. b. They are profit-making organizations. c. They provide installment loans to their members. d. They make secured loans only to non-members. e. They charge higher interest rates than other sources of consumer loans.

c. They provide installment loans to their members.

Leasing a car generally will result in _________ equity than purchasing a car. a. Higher b. Lower c. Trick Question

c. Trick Question

Joe Gustafson is a very busy person who prefers to use one account to handle all his financial services needs like checking, investing, and borrowing. Which of the following types of accounts is most suitable for Joe? a. A money market deposit account b. A savings account c. An asset management account d. A checking account e. A brokerage account

c. an asset management account

A _____ loan is intended to help consumers who have an unhealthy credit situation caused by overusing their credit. a. personal b. buy-down c. consolidation d. standard e. single-payment

c. consolidation

Interest rates are the lowest on: a. certificates of deposit. b. money market deposit accounts. c. regular checking accounts. d. savings accounts. e. money market mutual funds.

c. regular checking accounts

The least expensive method for banks to interact with their customers is through: a. phone calls. b. a vendor. c. the Internet. d. a full-service teller. e. an ATM machine.

c. the Internet

The more frequently a bank compounds interest, _____ for a given nominal rate will be. a. the higher the stated interest rate b. the lower the inflation rate c. the higher the effective rate d. the higher the normal rate e. the lower the yield rate

c. the higher the effective rate

The price of the car you are leasing is called the:

capitalized cost

At the end of your car lease period, you intend to turn in the car, and you will not pay extra at that time based on the residual value of the car. You have ____ lease.

closed-end

________ are the expenses that borrowers pay during the final step of a real estate purchase.

closing costs

The FDIC oversees and manages two separate insurance funds that apply to banks and savings associations. These two funds include the Bank Insurance Fund (BIF), which provides coverage for _____________ and the Savings Association Insurance Fund (SAIF), which insures deposits in ____________.

commercial banks savings associations

Depository institutions include:

commercial banks, savings and loan associations, savings banks, credit unions

When you lease your apartment from a nonprofit corporation that owns the building and you own a share of the nonprofit corporation, you own a:

cooperative apartment

Laura has a $100,000 balance in her checking account at Best Bank, and she has purchased a certificate of deposit (CD) worth $50,000 issued by Best Bank. Laura is also thinking of investing $200,000 either in Best Bank or in Trust Bank. Which of the following is a suitable strategy for Laura if she wants her deposits to be completely insured? a. Laura should invest $150,000 in a money market deposit account (MMDA) of Best Bank and invest $100,000 in an asset management account of Trust Bank. b. Laura should invest $200,000 in a money market deposit account (MMDA) of Best Bank. c. Laura should invest $150,000 in a money market deposit account (MMDA) of Best Bank and invest $200,000 in a money market deposit account (MMDA) of Trust Bank. d. Laura should invest $100,000 in a money market deposit account (MMDA) of Best Bank and invest $100,000 in an asset management account of Trust Bank. e. Laura should invest $100,000 in a money market deposit account (MMDA) of Best Bank and invest $100,000 in an asset management account of Best Bank.

d. Laura should invest $100,000 in a money market deposit account (MMDA) of Best Bank and invest $100,000 in an asset management account of Trust Bank.

Compared to other depository financial institutions, credit unions: a. pay lower interest on savings to their members. b. are more beneficial to all kinds of consumers. c. have a greater number of account holders. d. charge lower rates on loans to their members. e. have a greater number of branches.

d. charge lower rates on loans to their members.

A single-payment loan is advantageous to a borrower only if: a. the finance charges are calculated using the simple interest method. b. the finance charges are calculated using the discount method. c. it has a collateral note. d. funds are expected to be available in the future to repay the loan in a lump sum. e. the interest rate is more than that on an installment loan offered by commercial banks.

d. funds are expected to be available in the future to repay the loan in a lump sum.

An investor receives the highest interest rate on his or her: a. regular checking account. b. negotiable order of withdrawal (NOW) account. c. asset management account. d. money market deposit account (MMDA). e. share draft account.

d. money market deposit account (MMDA)

Commercial banks are able to charge lower interest rates than other lending institutions because: a. they make shorter-term loans. b. their depositors require higher rates. c. they make only secured loans. d. they usually take only the best credit risks. e. they get their funds from the money market.

d. they usually take only the best credit risks.

James finds it difficult to manage credit but wants the convenience of using a credit card. He wants to get a card that will provide direct access to his checking account. James should get a:

debit card

The loss in the value of an automobile that occurs over its period of ownership is called:

depreciation

Therefore, paying yourself first imposes financial ___________ on the act of saving.

discipline

A lump-sum deposit of $8,000 left in a bank for 12 years at 9%, compounded annually, will result in an ending balance of: (Select the closest answer.) a. $52,938. b. $96,000. c. $11,600. d. $16,640. e. $22,504.

e. $22,504

_____ obtain funds from their stockholders and through open market borrowing. a. Life insurance companies b. Credit unions c. Commercial banks d. S&Ls e. Consumer finance companies

e. Consumer finance companies

Which of the following statements regarding fixed-rate loans is true? a. The cost of fixed-rate loans decreases with a decrease in the market interest rate. b. The cost of fixed-rate loans increases with an increase in the market interest rate. c. The interest rates on fixed-rate-loans have periodic adjustment dates, at which time monthly payments are adjusted. d. Fixed-rate loans are preferable when interest rates are expected to fall. e. Fixed-rate loans are preferable when interest rates are expected to rise.

e. Fixed-rate loans are preferable when interest rates are expected to rise

The financial crisis of 2008-2009 followed by low interest rates has been beneficial to: a. shareholders. b. retirees. c. investors. d. savers. e. borrowers.

e. borrowers

Kate tends to issue checks quite often without having a sufficient balance in her account. She should look for an account with a(n) _____ facility. a. mutual fund management b. trust services c. ATM d. balance tracking e. overdraft protection

e. overdraft protection

simple interest

earnings on an amount which is determined based on the interest rate applied only to the initial deposit

Series EE U.S. Savings Bonds:

government savings bonds that are issued by the Treasury in small denominations (as small as $25)

_________ are loans offering low payments for the first few years, gradually increasing until year three or five, and then remaining fixed.

graduated-payment mortgages

Most lenders immediately will ______ the first time that you have difficulty meeting your loan payments.

grant an extension

Which of the following forms of consumer credit is among the cheapest and offers limited tax deductions?

home equity credit lines

overdraft

in the case of this condition, banks return the check to the party to whom the check was written due to insufficient balance in the account

The decision about whether or not to grant you credit will be made by:

individual creditors

deposit insurance

insurance program that protects depositor funds against the failure of the insured depository institution

compound interest

interest earned on the sum of the initial deposit and interest earned in prior periods

Fewer maintenance headaches since the term of the contract is usually equal to the length of the warranty - more closely associated with?

lease transaction

A(n) _________ ratio specifies the maximum percentage of the value of a property that a lender is willing to loan.

loan-to-value

If the maximum loan-to-value ratio that a lender will accept on a $100,000 loan is 90%, then the borrower must make a:

minimum down payment of $10,000 plus closing costs

The financing rate on a lease is called the:

money factor

I should reconcile my bank account ________, but I should verify my ongoing deposit and withdrawal transactions online every couple of days.

monthly

Fees charged by lenders at the time they grant a mortgage loan are called:

mortgage points

cashier's check

often called a banker's check payable to a third party is drawn by the bank's own funds in exchange for the amount specified in the check, plus, in most cases, a service fee

closed-end lease

often called a walk-away lease, because it allows the lessee to merely return the vehicle provided that the preset mileage limit has not been exceeded and the vehicle hasn't been abused.

A NOW account:

pays interest on deposited money

Which of the following is an example of phishing?

pretending to be an employee of a financial institution

capitalized cost

price of an asset being leased as specified in the lease agreement, which includes the negotiated cost of the vehicle and any applicable fees and taxes,

If you made a down payment of $11,000 on a house worth $110,000, the lenders will require _____ as a result of the size of the down payment.

private mortgage insurance

No early termination or excess wear and damage fees - more closely associated with?

purchase transaction

The seller of the house typically pays the

real estate agent's commission

An escrow account is used to collect _____ from one's monthly mortgage payment.

real estate taxes

reconciling my account will help me spot potential errors in the bank statement or my own records, and it will verify my account's actual balance as of the __________________.

reconciliation date

However, most people don't maintain an emergency living expense savings fund; instead, they expect to rely on their credit cards to pay their living expenses during these expensive and stressful events. The downside, or negative consequences, of this strategy is that it ______ their wealth since it involves the payment, rather than the receiving, of _________.

reduces interest

residual value

refers to the estimated value of a leased asset at the end of the lease period.

Credit offered in the form of ________ is most common in department and clothing stores and other high-volume outlets, where customers are likely to make several purchases each month.

retail charge cards

Treasury bills (T-bills) typically _____ .

sell in dominations of $10,000 AND income earned on T-bills is exempt from state and local taxes.

The real estate agent's commission is generally paid by the:

seller

Earnest money is the sum of money the home buyer pledges with the:

seller to indicate the intent to purchase

If you expect interest rates to increase in the near future, then you should invest in ________ investments so that you can: a. reinvest quickly when interest rates increase. b. lock in the higher interest rates before they decrease.

short-term a

With a bank credit card, you can often avoid interest charges if:

the account balance is paid in full every month

demand deposit

the general name given to an account that allows the account holder to access the funds through a variety of banking options such as ATM withdrawals, online banking, using debit card or through a teller.

time deposit

the general name given to deposits held by investors who are willing to invest their funds for longer periods of time and interested in earning higher interest rates than are available on demand deposits

Assume that you have taken a car on a closed-end lease for a period of 5 years. At the end of the fifth year, you would need to pay additional money only when:

the mileage limits are exceeded

account reconciliation

the process of ensuring that the money that left the bank account matches the amount the account holder spent

cash management

the term applied to the practice of time to time review of how liquid assets are collected, handled and used

depository institution

these financial institutions accept checking and savings deposits from individuals and business, and include commercial banks, savings banks, and credit unions