RWC Unit 5 Financial Math

Which of the following best describes the biggest problem with savings accounts today?

• They are no longer a secure option for your money

• The interest rates offered fluctuate with the stock market performance

• You aren’t allowed to withdraw your money anytime you want

• The interest rates offered are lower than the inflation rate

• Savings accounts do not allow for auto deposits

What is the difference between a savings account and a Certificate of Deposit (CD)?

• CDs typically earn a higher interest rate than savings accounts

• Funds deposited in a CD are locked in for a specific amount of time

• Unlike CDs, savings accounts do not charge penalties for early withdrawals

• All of the above

Corbin and his wife have a bank account that they use to pay their bills, and deposit their paychecks into regularly. Both of them have the authority to make changes to the account. Which of the following is most likely the type of account that they have?

• Individual Checking

• Joint Checking

• Individual Savings

• Joint Savings

• Individual CD

What is the term used to describe transactions that post to an account immediately?

• Point-of-Sale

• Credit Posting

• Joint Savings

• Instant Debit

• Electronic Funding

Natalie’s electric bill is automatically paid out of her checking account whenever it is due even though it’s a different amount each month. What account feature does she most likely have?

• Auto-pay

• Bill-pay

• Overdraft

• Direct deposit

Which of the following best describes the financial term floating money?

• Debit card transactions that post immediately to your account

• Money that floats away when dropped into a river

• Money that has been spent, or committed to be spent, but not processed by the bank yet

• Direct deposit amounts that come from employers

It is highly likely that long-term savings deposits will end up being worth less when they are withdrawn than when they were deposited.

• True

• False

Debit cards are attached to a bank account and not a line of credit.

• True

• False

Financial institutions like banks and credit unions are used more for growing wealth than they are for managing resources.

• True

• False

Which of the following best describes what it takes to achieve financial freedom?

• Have a lot of money

• Have a large annual income

• Have a large monthly net income

• Get out of debt