Consumer Sem1 Exam - Check Accts, Compnd Interest, & Budgeting

Front

What is a debit card?

Back

A debit card is a bank-issued card that allows the holder to access funds directly from their checking account to make purchases or withdraw cash.

Front

What is compound interest?

Back

Compound interest is the interest on a loan or deposit calculated based on both the initial principal and the accumulated interest from previous periods.

Front

How do you calculate the total amount owed on a loan with compound interest?

Back

The total amount owed can be calculated using the formula A = P(1 + r/n)^(nt), where A is the amount of money accumulated after n years, including interest, P is the principal amount, r is the annual interest rate, n is the number of times that interest is compounded per year, and t is the number of years.

Front

What do you have to pay when you take out a loan?

Back

When you take out a loan, you have to pay interest on the borrowed amount.

Front

Where can you find the account number on a check?

Back

The account number is located at the bottom of your check.

Front

What is a checking account?

Back

A checking account is a type of bank account that allows for numerous withdrawals and deposits, and is typically used for everyday transactions.

Front

What is the purpose of budgeting?

Back

Budgeting is the process of creating a plan to spend your money, helping you to manage your finances and ensure you have enough for your needs.

Front

What is the formula for calculating the balance of a checking account after transactions?

Back

The balance can be calculated by taking the previous balance and adding any deposits, then subtracting any withdrawals.

Front

What is the difference between a credit card and a debit card?

Back

A credit card allows you to borrow money up to a certain limit to make purchases, while a debit card deducts money directly from your checking account.

Front

What is the significance of the interest rate in loans?

Back

The interest rate determines how much extra money you will pay back on top of the principal amount borrowed.