PF: Everfi Savings Review

"Compounding  frequency" refers to:

• How often your interest is calculated and added back into your account
• How easily you can add money into your account
• What type of interest your account earns
• What interest rate you can expect from your account

Interest is:

• a charge for lending money to a bank
• the amount owed for borrowing money
• the amount added into your savings when opening a bank account
• a charge for the convenience of accessing money stored in your bank account

John just opened a savings account and wants to maximize the amount of interest he earns. Which of the following actions would enable him to earn MORE interest?

• A. Selecting an account with a high interest rate.
• B. Leaving his money in the account for long period of time.
• C. Transferring money into his checking account each month.
• Both A & B

Jorge has $300 for work he performed. He expects to spend the money in the next few weeks to buy a new bike. Which type of account will be best for Jorge?

• Certificate of Deposit (CD)
• Money Market Account
• Savings Account
• Checking Account

Joy is taking out a car loan which she will pay back with interest. Which option will require her to pay the lowest amount in interest?

• Annual Compounding
• Semi-Annual Compounding
• Monthly Compounding
• Daily Compounding

Tamara has $500 she is looking to save for a class trip. She wants to earn the most possible interest and will not need access to her money for a full year. Which type of savings account will be best for Tamara?

• Certificate of Deposit (CD)
• Money Market Account
• Savings Account
• Checking Account

The purpose of a budget is to:

• help you plan how you will spend the money you earn or receive.
• stop you from spending too much money.
• increase the balance of your savings account
• tell you how much you owe the government in taxes

To earn as much interest as possible, you should open a savings account that earns _______ interest and has the ______ interest rate.

• compound; lowest
• compound; highest
• simple; lowest
• simple; highest

What is the typical relationship between time and interest rate?

• Longer time period usually equals higher interest rates.
• Shorter time period usually equals higher interest rates.
• Longer time periods usually have no affect on interest rates.
• Shorter time periods usually have no affect on interest rates.

When it comes to saving money, what is a good rule of thumb?

• Keep most of your savings in your checking account
• Put aside money for savings each month
• Choose the savings account with the lowest interest rate
• Put anything you can't afford on your credit card