Consumer Math ch. 10
demand deposit
a noninterest-bearing account
certified check
a personal check that has been stamped by the bank guaranteeing the person receiving the check that it is valid
promissory note
a promise to repay a loan with interest by a specific date
canceled check
a receipt showing that a bill was paid
bank statement
a record of all the transactions that have taken place in a checking account
Overdraft
a withdrawal of more money from the bank than is in the account
i
amount of interest
B
amount of the loan
r
annual interest rate
Certificates of Deposit (CDs)
another form of investment that can be used to increase savings; at least a minimum amount of money must be invested for a specific length of time
On-line Banking
banking online is known as...
Register
checkbook record
traveler's check
checks that are convenient and safe to use when traveling
canceled checks
checks that have been cashed
Outstanding checks
checks that have been written but have not cleared the bank
Bounced check
checks that the bank refuses to cash due to a lack of funds
Outstanding checks
checks written but not yet cashed
A=p(1+r)^n
compound interest formula
r=2Mi/B(n+1)
constant ratio formula
the amount at maturity
cost and interest added together will always equal...
credit line
credit limit
credit cards
enable a person to have an item now and pay later
interest
fee paid for the use of money
add the interest to principal
formula for finding the amount
yearly interest paid/half principal amount
formula for finding the percent of interest
quarterly
four times a year
know that the loan can be repaid without putting undue stress on the family; do not borrow with the plan to repay with expected raises in salaries or bonuses; borrow for needs not just wants; do not borrow money to pay for an item if repaying the loan will take longer than the item is expected to last; shop around for the best interest rates
guidelines for borrowing money
half
how much the cost is of the face value
multiply the quantity times the face value
how to find the amount of maturity
add (i=prt) to the principal
how to find the total due
3%
if the rate of interest is 3% annually and it is being compounded annually, then the percent is...
Principal
is the amount borrowed
safety deposit box
located in a bank vault; holds valuables
the number of interest periods
n
Depositor
one who puts money into a bank account
the original principal
p
the rate of interest
r
check stubs or checkbook register
records of the checks written, the deposits made, and the current balance
i = prt
simple interest formula
signing the signature card, making the first deposit, ordering checks
steps in opening a checking account respectively...
to find and total all outstanding checks from the register; find any deposits from the register that are not shown on the statement and add to the bank balance; enter any bank service charges in the checkbook balance
steps to reconcile
bank balance
the amount in the account
$2.00
the amount per nickel roll
$.50
the amount per penny roll
$10.00
the amount per quarter roll
cashier's check
the bank's own check given to a customer in exchange for money
finance charge
the charge that includes the service charge and interest
half of
the cost is always what amount of the face value...
compound interest formula
the formula that can be used to find the amount of principal (new balance) at a given rate of interest which is compounded for a given number of interest periods
simple interest formula
the formula used to find the amount of interest on the borrowed money
maturity date
the maximum time that one has to wait for the bond to be worth its face value
outstanding check
the name of the check that hasn't cleared the bank
register
the name of the checkbook record that is kept separate from the checks
2 days
the number of days in which the banks must be notified of the loss of an ATM card to limit liability to $50
M; 12
the number of payments per year; it will always be...
transit number
the number used to identify a check; is the numerator of the fraction given on every check
rate of interest (%)
the percent of interest applied to the loan
1% to 2%
the percentage that is added to the unpaid average balance of the credit account each month
the interest is being compounded
the rate must be expressed how...
Series EE Savings Bonds
these are sold by the U.S. government and are sold for 50% of their face value
Deposit slips
these are used to put money into your account
n
total number of payments
semiannually
twice a year
personal identification number
what PIN means
compound interest; interest is paid on the interest that was added to the account the previous year
what is greater than simple interest? Why?
a plan to redeem
what should be done after interest is credited for that six-month period
active
what the credit card is determined to be if used at least once a year
credit history
what the credit line is based on
subtract from checkbook side
what to do with a service charge...
add to bank statement
what to do with an outstanding deposit...
Subtract it
what to do with the cash received when finding the total on a check
at regular intervals such as semiannually, quarterly, or monthly
when interest is added to depositors' accounts
when they're undisciplined
when one should not use a credit card
automatic teller machine
ATM means...
add outstanding deposits and subtract outstanding checks
2 steps in finding the bank balance
add interest and subtract bank charges
2 steps in finding the checkbook balance
the amount in the account
A
time
length of the loan in years
the longer the time period, the higher the interest rate and the less money required
the general principal about interest rates concerning time
$500
the liability that may be if the bank is notified after 2 days and up to 60 days after the ATM card is taken
the face value
the maturity value is also known as...
no
Do bank statements and checkbook records usually agree?
Yes
Do checking accounts pay interest on the balance in the account?
The card will be made to work for a person
If one uses a credit card wisely, what will happen?
monthly service charge
a few for the privilege of writing checks
debit card
a check-like thing; allows money to be withdraw from the bank and paid directly to what's being payed for
Interest
a fee charge for the use of money
