Banking (Financial Literacy Unit 2)

Richard's checkbook register as of 02/19: Enter the following transactions into Richard's checkbook register and state his ending balance:

$1,009.81

Jack plans on using network ATMs about 4 times per month. What would be Jack's total estimated annual fees for a checking account with direct paycheck deposit, one overdraft per year, and no 2nd copies of statements?

$104

What was the value of the third check Tony deposited?

$105.20

Olivia deposits $6,952 in a savings account paying 3.72% interest. To the nearest dollar, how much money does Olivia have in total after sixteen years?

$11,090

Which of the following are possible amounts for the third check and the cash that Cindy deposited?

$122.04 in cash and a $205.64 check

Megan wants to first look for a single transaction that could have caused this problem with reconciliation. What is the amount of the transaction that Megan should look for in order to find a solution to the problem?

$137.20

Abigail has an account that pays 6.92% simple interest per year and wants to accumulate $5,896 in interest from this account over six years. How much money should Abigail invest in this account to meet this goal?

$14,200.39

Colin wants to set up an aquarium.. He already has a tank, but needs to purchase fish, filters, and plants. If the cost of the fish is $84.79, the filters usually cost $60.45 but Colin finds them on sale for $44.75, and the cost of the plants is $18.66, determine how much of Colin's $488.85 savings will be used to set up his aquarium.

$148.20

When Irving was done, he checked his account balance and found he had a total of $95.06. How much money was in Irving's account to begin with?

$151.49

Yolanda wants to first look for a single transaction that could have caused this problem with reconciliation. What is the amount of the transaction that Yolanda should look for in order to find a solution to the problem?

$19.99

Ike invests $7,660 in an account paying 7.27% simple interest annually. How much interest has Ike gained after four years?

$2,227.53

Faye's bank charges her a $2.25 service fee every time she uses an out-of-network ATM. If Faye uses an out-of-network ATM twice a week, how much money does she pay in service fees every year?

$234.00

Bob's bank charges him a $3.15 service fee every time he uses an out-of-network ATM. If Bob uses an out-of-network ATM an average of three times every two weeks, how much will he pay in service fees over the course of a year?

$245.70

If the bank charges Ted an overdraft fee of $25 every time he overdraws his account, and Ted overdrew his account on Wednesday but not on Friday, which of the following is a possible amount of money that Ted could have had in his account last Sunday? Assume that the only debits and credits not listed are overdraft fees.

$280

Kurt's ending balance on April 30 was $331.36. Add or subtract the items in his check register, shown below, to find his balance on May 30. Assuming this record is complete, what is Kurt's ending balance?

$293.11

Nicole deposits $2,136 in a savings account paying 5.36% interest. To the nearest dollar, how much money does Nicole have in total after nine years?

$3,166

When Evelyn was done, she checked her account balance and found she had a total of $208.16. How much money was in Evelyn's account to begin with?

$305.69

Henry and Walter open savings accounts at the same time. Henry invests $6,500 at 4.54% simple interest, and Walter invests $7,100 at 4.74% simple interest. After eight years, how much more interest has Walter earned than Henry?

$331.52

Trevor has an investment worth $6,774.50. He made his only deposit in it 22 years ago. Given that the investment yields 2.7% simple interest annually, how big was the initial deposit?

$4,250.00

June has a savings account with an annual simple interest rate of 2.6%. She hopes to gain $6,500 in interest over a period of eleven years. To accomplish this, June invested $17,801 in the account, but later realized that this was not enough money. To the nearest dollar, how much more money should June have initially invested to reach her goal?

$4,926

Ruby wants to start her own business taking photographs. She already has her own camera, but needs to purchase lights, a photo printer, and photo paper. If the cost of the photo printer is $251.99, the cost of lighting is $150.00, and the cost for 100 sheets of photo paper is $30.98, determine how much of her savings will be used to start her company, given that she has $840.32 in savings.

$432.97

If the bank charges Dominic an overdraft fee of $25 every time he overdraws his account, and Dominic overdrew his account on Thursday but not on Saturday, which of the following is a possible amount of money that Dominic could have had in his account last Sunday? Assume that the only debits and credits not listed are overdraft fees.

$435

How much cash did Liz receive?

$458.57

Sam invests $9,400 in a fund yielding 5.2% simple interest annually. At the same time, Pat shops around for a better interest rate and invests $9,400 in a fund yielding 6.0% simple interest annually. After seven years, how much more interest has Pat's fund earned than Sam's fund?

$526.40

Iris has an investment worth $8,813. She made her only deposit in it seven years ago. Given that the investment yields 3.7% simple interest annually, how big was the initial deposit?

$7,000

Consider the following incomplete deposit slip: How much cash did the person who filled out this deposit slip receive?

$721.50

Based upon past experience, Barry expects no overdrafts. He expects no 2nd copies of statements. Barry estimates that he will use network ATMs about 5 times a month with either bank. Barry decides in the end to choose EECU. Assuming that both banks provide the necessary services equally well, and based upon the tables of fees given above, how much can Barry reasonably expect to save annually by choosing EECU in this case over E-town bank?

$78

Which of the following investments will earn the smallest amount of interest?

$8,030, invested for 2 years at 2.0% interest

Gina invests $1,677 in an account paying 8.61% simple interest annually. How much interest has Gina gained after six years?

$866.34

On his way out to meet a friend for lunch, David realized that his financial record was not up to date. He notices that he forgot to record three transactions. The first transaction was on August 2nd in the amount of $12.32, another transaction on that same day in the amount or $52.34, and finally a transaction on August 8th in the amount of $85.35. Determine David's balance carried forward for the 8th of August using the table below and the information provided.

$899.15

How much did Kay deposit in cash and coins?

$93.44

At the end of the week, how much money is in Danielle's account?

$99.91

Annie wants to make a deposit into her savings account. She is depositing 3 checks, one for $50.32, another for $324.89, and finally one for $753.15. She would like to receive $137.82 in cash after the deposit. Calculate the amount that she will be depositing into her savings account.

$990.54

If you wish to calculate the interest on an investment with a rate of 3.58%, what number will you plug into your equation?

0.0358

If you wish to calculate the interest on an investment with a rate of 6.17%, what number will you plug into your equation?

0.0617

Maggie has $14,100 to invest, and wishes to gain $4,000 in interest over the next eight years. Approximately what is the minimum simple interest rate Maggie needs to reach her goal?

3.55%

Arthur has $19,500 to invest, and wishes to gain $8,000 in interest over eleven years. Approximately what is the minimum simple interest rate that Arthur needs to achieve his goal?

3.72%

If you invest $8,600 at a 3.95% simple annual interest rate, approximately how long will it take for you to have a total of $21,000?

36.5 years

When choosing a bank, why might ATM availability be valuable to someone who values convenience over cost?

A greater availability of ATMs may make it easier to do bank transactions. Someone may choose this availability over a higher savings interest rate

Which of the following would you expect to find on a monthly account statement?

A list of credits and debits made during the period

Kim has worked in the tech industry for some time and would like to start consulting. In opening her new business, she will need equipment. She needs to purchase 3 laptops, 2 desktop computers, and a fax machine. Each laptop costs $546.78, each desktop computer costs $1,255.99, and the cost of the fax machine is $125.99. She currently has $3,500 in her savings account. Determine if Kim has enough in her savings account to cover the expenses of her new company, and if she doesn't have enough, determine the amount needed to cover the cost.

After expenses, Kim will need an additional $778.31 to start her company

Liam uses checks and a debit card, but does not always write all the transactions in his checkbook register. He has lost track of his checkbook balance. Liam looks up the "available balance" using online banking, and writes it on the next line as his new checkbook balance available to spend. What is wrong with Liam's method?

All of the above

You have decided both to open a savings account and to purchase a vehicle. You would like a savings account with the highest interest rate and a vehicle loan with a low interest rate. You currently have a checking account at Bank A. From the banks listed below, determine with which bank you should open a savings account and at which bank should you apply for your vehicle loan.

Bank B for the car loan and Bank A for the savings account

Pablo wants to start a savings account and apply for a vehicle loan. He's not sure which bank he should open the savings account with and which bank he should apply for the vehicle loan. He wants the most return on his money in savings, but he doesn't want a high rate on his vehicle loan. Given this information and the tables below, determine with which bank Pablo should open his savings account and with which bank he should apply for a vehicle loan.

Bank B for the car loan and Bank B for the savings account

Emma usually has about $1000 in her account at any given time during the month. She usually visits the ATM twice a week and is interested in banking online options. Bank R has 10 ATMs within a 5 mile radius of Emma's home. Bank S has 1 ATM 10 miles from Emma's work. Which bank should she choose?

Bank R

In what way is a debit card similar to a check?

Both pull money directly from a checking or savings account

When Theresa makes the calculations, she finds that she cannot afford everything that she would like to have. What is the cheapest aspect of the party that she can eliminate to keep from overdrawing her account?

Catering

When Richard makes the calculations, he finds he does not have enough money to visit each city. What is the cheapest city that Richard can drop to avoid overdrawing his account?

Detroit

Based upon past experience, Jessie expects to accidentally overdraft the account about 3 times per year, unfortunately all in the same month, due to unexpected charges and miscommunications. She expects no 2nd copies of statements, and to use network ATMs 4 times per month with either bank. Based on the tables of fees, which bank can be reasonably expected to cost Jessie the least amount in fees per year?

Good bank will have the least amount in fees per year

Having a savings account can contribute to a person's overall financial well-being. Which one of the following is NOT a benefit of maintaining a savings account?

Having a savings account gives individuals the ability to borrow money from members in the community

Choose the circumstances in which a debit card can be used. I. Point-of-sales transactions II. ATM withdrawals

I and II

Jan wants to save a $2000 gift from her grandparents, and add $50 per month as emergency funds. She has narrowed her search for a savings account to 2 banks, Bank A and Bank B. Bank A pays a fixed rate of interest, and Bank B pays a variable rate, but both rates are currently the same. What advice would you give Jan about how to choose an account based upon her own needs?

I and II

On which day or days does Isabelle get charged an overdraft fee?

I and III

Roberta's monthly bank statement says that she has a balance of 386.29, but Roberta's check register says that her balance is 370.77. Which of the following are still outstanding? I. A $78.17 check to the electric company II. A $16.15 deposit from Roberta's roommate III. A $22.67 check to the grocery store IV. A $62.65 deposit from Roberta's tax return

I and IV

Which of the following items are elements of a monthly checking account statement? I. A period (beginning date and ending date) II. A beginning balance and ending balance. III. A detailed list of debits and credits during the period.

I, II and III

Which of the following items may be a good consideration in selecting a bank? I. The bank sends a representative to the local mall to promote new applications. II. Number of ATMs or bank branches near where you live, shop, work, or travel. III. Knowledge of personal usage habits and needs.

II and III

Brett tallies up the transactions in his check register and comes up with a total balance of $248.53, but his bank statement says that his balance is $257.72. Which of the following are still outstanding? I. A $44.09 check to the electronics store II. A $73.98 check to the mechanic III. A $49.96 paycheck deposit IV. A $64.79 check deposit from Brett's cousin

II and IV

Melanie's monthly bank statement says her balance is $280.82, but her check register says that her balance is $312.55. Which of the following are still outstanding? I. A $56.49 check to the drugstore II. A $113.42 paycheck deposit III. A $32.62 refund deposit IV. An $81.69 check to the music store

II and IV

Which of the following must be present for a check to be legitimate? I. The recipient's bank II. The date III. A memo or note

II only

Which statement or statements accurately describe a good way to avoid excessive service fees? I. Try to deposit money in large batches rather than in small amounts. II. Try to limit the number of withdrawals you make from out-of-network ATMs. III. Try to avoid using your debit card online.

II only

Miranda is opening a checking account, but she left her driver's license at home. Which, if any, of the following can she use to open her account anyway? I. Sav-A-Lot Discount Card II. Passport III. Social Security card

II or III

Ben is looking at banks for checking and savings accounts. Some offer car loans and others do not. Ben may need a car loan sometime in the next few years. But Ben wonders if he should really ask what kinds of loans the bank makes, because he is getting a checking account, not a car loan. Which statement below gives the best reason for Ben to consider loan availability in choosing a checking account?

If he needs a car loan in the future, he will have a relationship of trust with the bank

Steven is looking at banks for checking and savings accounts. Some offer home loans and others do not. Steven may need a home loan sometime in the next few years. But he wonders if he should really ask what kinds of loans the bank makes, because he is getting a checking account, not a home loan. Which statement below gives the best reason for Steven to consider loan availability in choosing a checking account?

If he needs a home loan in the future, he will have a relationship with the bank

When calculating simple interest, what must you do if you want to invest for months or weeks instead of years?

Interest rates are annual, so you must convert the units into years

Which of the following forms of I.D. is not an acceptable form of I.D. for opening a savings account?

Library card

What are you primarily doing when you reconcile your checking account?

Making sure that your records match your bank's records.

Manny has just filled out his deposit ticket for his savings account. He hands it to the teller and the teller hands it back to Manny. The teller explains to Manny that the deposit ticket cannot be accepted in its current form. What must Manny do to the deposit ticket in order for the teller to process the deposit ticket?

Manny forgot to sign the deposit ticket for less cash back

Why is it sometimes easier to open an account with a bank rather than with a credit union?

Most credit unions require some kind of affiliation, but banks will let anyone with money open an account

Based on the tables of fees, above, if Sharon chooses First State Bank, will it save her money over choosing Common Bank?

No, Common Bank will save Sharon more money

James is opening a checking account. The bank employees do not know him personally, and he has forgotten his identification. Can he open the account anyway, and use the ID later when he gets his debit card?

No, because proper identification is required to open a checking account.

Sue is considering splitting the cost of a new TV with her roommate. Her share would be $305.22. Can Sue afford this?

No, making that purchase will overdraw her account

Paul has decided to set up his own recording studio. He needs to purchase four speakers at $435 apiece and two mixers at $772 apiece. He also needs to soundproof a room, which will cost him $838. If Paul has $4,500 in his savings account, how close can he come to setting up his studio?

Paul can set up his studio and have $378 left over

In the formula I=P·r·t, what does P stand for?

Principal: the amount of money you initially invested

In the formula I=P·r·t, what does r stand for?

Rate: the percent that interest is paid annually as a decimal

Assuming that this is a complete, if scrambled, record of Ronald's May spending and that any overdraft fees incurred do not affect the running total, how many times did Ronald overdraw his account in May?

Ronald overdrew his account twice

Assuming that this is a complete, if scrambled, record of Sandy's July spending and that any overdraft fees incurred do not affect the running total, how many times did Sandy overdraw her account in July?

Sandy overdrew her account more than twice

Why is simple interest useful for planning parts of your financial future?

Simple interest is very regular and can be calculated in advance

Lucy will open a checking account and 3 savings accounts for different purposes (emergency fund, gift fund, and education fund). Which of the following items should not be among her main considerations in selecting these accounts?

The account recommended for somebody with different needs

Nick is making a deposit with a check and wants cash back. His deposit slip has his name, his account number, the date, the amount of the check, his signature, the total deposit amount, and what else?

The amount of cash he wants

What is a "closing balance?"

The amount of money you have at the end of the statement period

What is a "balance brought forward?"

The amount of money you have from the previous statement period

Macky wants to open a checking account. He is examining different banks and banking accounts. Then he will choose a bank account for his needs. Which of the following statements should not be one of Macky's reasons for choosing a bank?

The first bank Macky considered offered a chance to win a prize upon opening an account

Which of the following items may not be a good consideration in selecting a bank?

The word "FREE" is prominently displayed in the marketing pamphlet

Which statement below gives the best reason for considering personal needs, values, and circumstances in selecting a bank account?

This information can lead to a better match between account features and the person's needs

A point of sale transaction occurs when a debit card is used to purchase items at a grocery store.

True

Anna is choosing a bank and a checking account. She would be well-advised to consider her personal needs and values in the analysis, not only the bank's features.

True

Savings accounts are a reliable way to store money for the future.

True

Vítor knows he must prepare and possibly prevent overdraft funds fees since they are charged automatically. Which statement below would be the least effective element of a plan Vitor could use to accurately estimate (or minimize) overdraft fees on the account?

Use the debit card for a large number of small purchases and check the balance later

On what day does Frank first get charged an overdraft fee?

Wednesday

Adam is considering getting his car a new paint job. Doing so will have a total cost of $264.83. Can Adam afford this?

Yes, but doing so will clear out his account

When must you sign a deposit slip?

You only need to sign a deposit slip when receiving cash

Which of these is not a factor you need to consider when choosing a bank?

d. The amount of money you paid in income taxes last year

You are examining your choices of banks to open a new savings account. Costs include monthly maintenance fees and statement copy fees. Income can come from ___________.

interest on deposits

Michael is making a deposit with a check and wants cash back. His deposit slip has his name, his account number, the date, the amount of the check, the amount of cash that he wants, his signature, and what else?

the net deposit amount

Alissa would like to make a deposit into her savings account. She filled out a deposit ticket and handed it to the teller at her bank. The teller apologizes to Alissa and explains that she cannot accept the deposit ticket in its current form. Determine what, if anything, Alissa will have to change in order for her deposit ticket to be accepted.

the total is calculated incorrectly