Chapter 8 Saving -Test

A written promise to pay a debt by a specified date is called a

• yield

• bond

• bank deposit

• dividend

Financial institutions that offer memberships to people who share a common bond, such as people in a particular profession, company, or labor union, are

• saving banks

• credit unions

• savings and loan associations

• commercial banks

Interest paid annually at the end of the year on the average balance in a savings account

• compound interest

• simple interest

• consumer interest

• fixed interest

If you deposit $200 in an account that pays 6 percent simple interest per year, which of the following would be the balance in your savings account at the end of the first year?

• $210

• $250

• $212

• $206

Interest that is paid on the principal and also on previously earned interest, assuming that the interest is left in the account, is called

• simple interest

• compound interest

• consumer interest

• flexible interest

If interest at 6 percent is compounded annually on Carlos' $500 savings account, how much will he have in his account at the end of two years, assuming that he withdraws nothing during the two years?

• $500.00

• $561.80

• $560.00

• $530.23

Which of the following specializes in lending to consumers who want to buyhomes?

• commercial banks

• credit unions

• savings and loan associations

• finance companies

Savings accounts are

• offered by all savings institutions

• a place in which you can deposit money

• a way you can earn interest

• all of these

Interest can be compounded

• annually

• semiannually

• quarterly

• all of these

The dollar value printed on a bond is the

• number of the bond

• face value of the bond

• interest of the bond

• term of the bond