Chapter 8: Saving
Silas deposited $800 in a savings account that pays 4% simple interest. How much money will he have in the account after one year?
$832
Lucas and you'll have a down payment for a home and have found a home they want to purchase. Which type of financial institution specializes in lending money to consumers to buy homes?
Savings and loan associations
Which of the following specializes in lending to consumers who want to buy homes? finance companies, commercial banks, credit unions, or savings and loan association
Savings and loan associations
Coop lives in a city where there are several types of financial institutions from which to choose. He has $5000 to deposit. He would prefer to own part of the institution where he makes his deposit in order to receive dividends. Which institution does not match his preference? Commercial bank, savings and loan, savings bank, or credit union
Savings bank
Interest paid annually at the end of the year on the average balance in a savings account is ______________.
Simple interest
If Maya places her $500 savings in an account that pays her 4% interest compounded quarterly, how much interest will she earn on her investment?
$16.00
If you deposited $300 in an account that pays 6% simple interest per year, which of the following would be the balance in your savings account at the end of the year?
$318
If interest at 6% is compounded annually on Carlos is $550 savings account, which of the following will he have in his account at the end of two years, assuming that he withdraws nothing during the two years?
$617.98
Marlon has accumulated $500 in his savings account: however, he is earning only 2.25% simple interest on his savings. He would like to take all or part of his savings and invest in some type of account that would pay him a higher interest rate. Given the amount he has to invest, which of the following would be his best choice?
A certificate of deposit
Saving accounts are ______________
A place in which you can deposit money, offered by any savings institution, a way you can earn interest
If Reilly wants to purchase US government savings bonds, where can he go to purchase them?
A savings and loan association, a post office, and a credit union
As a real estate agent Allegra receives monthly commission checks. This month her commission check will be over $5000. She wants to place the entire $5000 and a safe investment for six months. Given the amount she has to invest in her preferences, what would be her best choice?
A treasury bill
A written promise to pay your debt by specified date is called a ________
Bond
Interest that has paid on the principal and on previously earn interest, assuming that the interest is left in the account, it's called _____________.
Compound interest
As a school teacher, Liz can choose to join a financial institution with other school employees that offered her a membership when she deposits her money there or opens a checking account. This type of financial institution is known as a _______________.
Credit union
Financial institutions that offer memberships to people who share a common bond, such as people in a particular profession, company, or labor union are ________________
Credit unions
Interest can be compounded _____________.
Daily, quarterly, annually
The dollar value printed on a bond is the __________.
Face value of the bond
True or False: A credit union is a financial institution that serves individuals and businesses with variety of accounts, loans, and other financial services
False
True or False: a dividend is not actually a share of a company's profits
False
True or False: the best way to save successfully is to make saving a regular payment from each paycheck
False
True or False: the more often interest is compounded, the less interest you make.
False
True or False: when you save, you trade spending now for the ability to spend in the future
False
Jade received a substantial bonus from her employer at the end of the year. She would like to place her bonus in a U.S. government bond that protects her investment from inflation. Which of the following would be the correct choice?
I savings bonds
Vicki placed $3000 in a certificate of deposit for a one-year period of time. At the end of the year she had earned $150 in interest on her investment. Her original $3000 is known as ___________
Principal
True or False: almost all deposits are insured by a federal government agency
True
True or False: money market accounts pay higher interest rates than regular savings accounts do.
True
True or False: the higher the rate of interest, the less interest your money will earn.
True
True or False: there are many compound interest calculators available on the World Wide Web
True
True or false: simple interest is earned on just your principal, not on the interest earned previously
True
