Unit 2: Banking Review

Which account is used when you do not need the money at the moment and earns the highest interest

• Regular Savings account

• Money Market Account

• Checking Account

• Certificate of Deposit

Answer explanation

A certificate of deposit (CD) is an account that offers you a higher interest rate than a traditional savings account in exchange for leaving your money untouched for an agreed upon time

What is an effective strategy for personal saving?

• Wait until the end of the month and save what ever is left

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

• Covver all of your wants and needs and save what ever is left over

• Take out a payday loan so you can save before you receive your paycheck

Tags

CCSS.7.RP.A.3

Christian wants to have an emergency fund to cover 3 months of his expenses. His monthly gross pay is $5000 and his monthly expenses are $3000. If he plans to save 15% of his pay each month, how long will it take him to build his emergency fund? (number in terms of months)

Answer explanation

emergency fund: $3000*3 = $9000

Savings: $5000*.15 = $750

Number of months needed: $9000/$750 = 12

Tags

CCSS.7.EE.B.3

CCSS.7.RP.A.3

What does the 50-30-20 rule of budgeting refer to?

• 50% is needs

  30% is wants

  20% is savings

• 50% is savings

  30% is needs

  20% is wants

• 50% is wants

  30% is savings

  20% is needs

• 50% is savings account

  30% is checking account

  20% is investment

Tags

CCSS.7.EE.B.3

CCSS.7.RP.A.2

CCSS.7.RP.A.3

When should your start saving for your retirement?

• Right after you pay off your student loans

• As soon as you have your first full time job

• Once you are debt-free, including paying off all credit cards, auto loans, and your mortgage

• At age 45, so you have exactly 20 years until retirement

Tags

CCSS.HSS.MD.B.5

what is the recommended amount of time that you should accumulate in your emergency fund

• 3-6 years

• 3-6 months

• 1-2 years

• 6-12 months

List from lowest to highest in terms of interest rate

• 1) Online Savings account

  2) savings account at traditional bank

  3) 10 year CD

  4) 5 Year CD

• 1) 10 year CD

  2) online savings account

  3) 5 year CD

  4) Savings account at traditional bank

• 1) 10 year CD

  2) savings account at traditional bank

  3) 5 year CD

  4) Online savings account

• 1) savings account at traditional bank

  2) online savings account

  3) 5-year CD

  4) 10-year CD

Tags

CCSS.HSA.SSE.A.1

What does "living paycheck to paycheck" mean

• Paychecks are once a month

• Paychecks are covering monthly expenses only

• Paychecks are covering Wants and Needs of Family

• Paychecks are not direct deposited

Tags

CCSS.7.RP.A.3

When purchasing an item with your debit card

• credit card company pays for the cost

• its deducted from your checking account

• credit card company provided you with a cash advance

• it is deducted from savings account

Fill in the blanks: If inflation is ____________ your savings account interest rate then you will be _____________ purchasing power.

• Lower than, losing

• Lower than, gaining

• Equal to, gaining

• Lower than, losing