NGPF Unit 3 Saving Review

Front

Which of these statements about saving is INCORRECT? People often believe they are saving when they buy products at a listed discount, even if they didn't need the product in the first place, It is extremely difficult to open a traditional savings account, as you typically need at least $10,000 for your initial deposit, Without a separate savings account to pay yourself first, it's more likely that you'll spend all of your income each month, Billions of dollars are spent on marketing to persuade consumers to spend money instead of saving it

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

Front

Sam saved $2,000 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 few years AND wants to earn the highest interest rate? Regular savings account, Money Market account, Checking account, Certificate of Deposit

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Certificate of Deposit

Front

Which bank is the best option for Julie, who is 18 years old and opening her first savings account? Options: BANK 1 (not FDIC insured, 5% interest, $20 minimum deposit), BANK 2 (FDIC insured, 0.01% interest, $50 minimum deposit), BANK 3 (FDIC insured, 0.02% interest, $10,000 minimum deposit).

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Bank 2

Front

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

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Annually

Front

If Benjamin deposits $1,000 into a savings account that pays 1% interest, the 1% interest for year two would be based off ____________ for simple interest and ________________ for compounding interest.

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

Front

Which of the following is an effective strategy for personal saving?
- Wait until the end of the month and save whatever is left in your checking account
- Save a certain percentage of each paycheck and deposit it directly into a savings account
- Cover all of your wants and needs and save whatever is left over
- Take out a payday loan so you can save before you receive your paycheck

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

Front

Which of the following statements about banks is FALSE?
If it is FDIC-insured, your money is safe even if the bank fails
Many banks pay interest on the money you deposit with them
Historically, savings accounts earn higher returns than investments in the stock market

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

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You want to take earnings from your part-time job to pay for a new iPhone. Your monthly take-home pay is $600 and the iPhone costs $1,300. What percentage of your pay do you need to save in order to buy the laptop in 12 months?

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18%

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What percentage of your monthly take-home pay of $500 do you need to save in order to buy a laptop that costs $1,200 in 12 months?

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20%

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You are developing a savings plan and using short-, medium-, and long-term goals to motivate you. Which represents possible goals from short-term to long-term? Save for…
A new cell phone, college tuition, a house down payment

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A new cell phone, college tuition, a house down payment