Unit 2 - Saving

Susie feels her best option for saving her money is in an account that has a 2% interest rate. How long will it take for her money to double?

• 1 year

• 2 years

• 10 years

• 36 years

If you deposit $500 into a CD (Certificate of Deposit) with an interest rate of 1% for 5 years, how much simple interest will you earn after THREE years? (Principal X Rate X Time.)

• $1
• $5
• $6
• $25

An advantage of this savings option is a slightly higher rate, however you don't have access to your money for a period of time. (6 months or longer)

• Regular savings account
• Money Market account
• Checking account
• Certificate of Deposit

People often believe they are saving when they buy products at a listed discount, even if they didn't need the product in the first place.

• True
• False

You are comparing two savings accounts based on the interest you would earn and the fees they charge. Assuming you have a savings account with an average balance of $500, which combination of interest rates and fees are a better deal? (Hint: Using a one year period, determine the balance that you would have at Bank A and Bank B).

• Bank A offers you a savings account with a 10% annual interest rate and $5/month in fees
• Bank B offers you a savings account with 2% annual interest rate and no fees
• The two banks deals are equivalent
• Trick question -- it's a bad idea to open a savings account with just $500

Billions of dollars is spent on marketing to persuade consumers to spend money instead of saving it

• True
• False

Without a vehicle to save (like a savings account), it's much easier to spend and harder to keep track of finances

• True
• False

It is extremely difficult to open a savings account, as you typically need at least $10,000 for your initial deposit

• True
• False

When opening an account as a minor you will need to bring

• your grades so you get a higher interest rate
• only money to deposit
• An adult cosigner because you are under 18
• An adult cosigner because you are still a student

Both banks have fees competitive with other banks. Which bank is the best option?

• Bank A
• Bank B
• Both banks are equally good options