UNHS - Personal Finance - Self check 9

What does “pay yourself first” mean?

• Wait until all bills are paid to put money in savings.

• Put money in savings at the start of each pay period.

• Wait until the end of each pay period to save money.

• Keep all of your savings in a single account.

What is a specific goal?

• save $75 each pay period

• save a lot of money

• make as much money as possible

• cut expenses when possible

Which goal is attainable?

• saving $150 a month when you make $150 each month and pay for car insurance

• saving $150 a week when you are only paid $150 dollars every other week

• saving $75 dollars each pay period when you make $150 each pay period

• doubling the money in your account at a 3 percent interest rate in ten years

What is a DISADVANTAGE to a passbook savings account?

• a high minimum balance is required

• not FDIC insured

• money can be accessed anytime

• lower interest rate

What is an ADVANTAGE of a certificate of deposit?

• higher interest rate

• no penalty for early withdrawal

• money can be accessed anytime

• interest rate increases as money is compounded

Which account will have the highest interest rate?

• a passbook savings account

• a long-term certificate of deposit

• a short-term certificate of deposit

• statement savings account

In an account, the principal is

• the total amount of interest you make.

• the original amount you deposit.

• your deposit added to the amount of interest.

• the number of times interest is figured each year.

Compounding is

• adding interest to the principal in an account.

• subtracting interest from the principal in an account.

• deducting taxes on interest that your account makes.

• figuring the simple interest that an account will make.

What is the simple interest for THREE years on an account with a $1,500 principal and a 3 percent interest rate?

• $1,365

• $1,500

• $135

• $45

If you have a savings account with a $2,000 balance and a 2.96 APY, how much interest will you get in one year?

• $59.20

• $69.20

• $60.00

• $5.920