Pf savings assessment

If you deposit $200 into a CD (Certificate of Deposit) with an interest rate of 1% for 3 years, how much simple interest will you earn after THREE years?

$6

If you used the 50-30-20 rule of budgeting, how much money would you be saving?

20%

You want to take earnings from your part-time job to pay for a new laptop. Your monthly take-home pay is $500 and the laptop costs $1,200. What percentage of your pay do you need to save in order to buy the laptop in 12 months?

20%

Joelle wants to have an emergency fund to cover 6 months of her expenses. Her monthly gross pay is $4,000 and her monthly expenses are $2,000. If she plans to save 10% of her gross pay each month, how long will it take her to build her emergency fund?

30 months

The highest yielding savings accounts are paying historically low interest rates, so Maria is only able to get a 1% annual interest rate for her savings account. Assuming interest rates do not change, use the Rule of 72 to approximate how many years it will take for her to DOUBLE her money in this account?

72 years

Zola just secured her first job after college, and she's heard that it's important to start investing for her retirement. She can afford to put 5% of her monthly salary toward retirement. What type of account should she choose for this goal?

IRA

Which of these statements about savings is incorrect?

It is extremely difficult to open a savings account, as you typically need at least $10,000 for your initial deposit

Which of the following individuals is the wealthiest?

Karina owns a $50,000 car and has $5000 remaining on her car loan.

Which of the following is an example of delayed gratification as it pertains to saving?

Not buying a muffin or breakfast sandwich every morning during the workweek so you can buy a really nice breakfast for your family once every few weeks

Which list includes the most important factors to consider when opening a savings account?

The fees, the interest rates, and the minimum deposit to open the account

Which of the following statements is TRUE?

The interest rate on your savings account will vary over time and be set by the bank.

You open a new bank account at Eastside Savings. You see FDIC stickers around the bank, and the teller specifically mentions that Eastside Savings is "FDIC insured". A few months later, you hear on the radio that Eastside Savings is struggling to stay in business. Your savings balance is $500. What would happen to that money if Eastside Savings failed?

You would receive all the money you have deposited at Eastside Savings since FDIC insurance covers accounts up to $250,000.

Jeremy is a 17-year-old junior in high school and just started his first job. He wants to open a savings account. Which of these will he need to bring to the local bank branch in order to start an account?

An adult cosigner because he is under 18

When a bank says their savings account earns 1% interest, that typically means you will earn 1% interest over what period of time?

Annually (a year)

You are comparing two savings accounts based on the interest you would earn and the fees they charge. Assuming you have a savings account with an average balance of $500, which combination of interest rates and fees are a better deal? (Hint: Using a one year period, determine the balance that you would have at Bank A and Bank B).

Bank B offers you a savings account with 2% annual interest rate and no fees

Juan saved $1,000 from his summer job cleaning pools. Which of these savings vehicles would work best for him if he doesn't need access to the money for a number of years AND wanted to earn the highest interest rate

Certificate of Deposit

Which of the following statements about banks is FALSE?

Historically, savings accounts earn higher returns than investments in the stock market

All of the following are good strategies to develop savings habits EXCEPT

Request to be paid in cash so you can save a certain percentage of your money in a shoebox in your room every month

Which of the following is an effective strategy for personal saving?

Save a certain percentage of each paycheck and deposit it directly in a savings account

You are developing a savings plan and using short-, medium- and long-term goals to motivate you. Which of the following might you pick as the most long-term goal?

Saving for retirement

Malcolm is working full-time and wants to make sure he's saving strategically for four specific goals: an emergency fund ($5000), a flight home to see his parents for the holidays ($450), a downpayment on a new car ($3000), and his retirement (2% of his monthly take-home pay). What's his best strategy?

Set up 3 separate savings accounts for the first 3 goals and a retirement investment for the 4th

Assume Sid the Saver is earning 0.5% interest on his savings account while inflation is running 2% per year. Which statement below is TRUE?

Sid's purchasing power is decreasing by 1.5% per year

Stanley deposits $1,000 into a savings account that pays 1% interest per year. At the end of the first year, he's earned $10 in interest and there is $1,010 in the account. If the account has simple interest, the 1% interest for year two would be based off ____________. If the account has compounding interest, the 1% interest for year two would be based off ________________.(NOTE: The first choice goes in the first blank, the second choice goes in the second blank).

The original deposit ($1,000); The year one account balance ($1,010)

What would be a good time to spend money from your Emergency Fund?

You lose your job but still have bills to pay