Savings Accounts & Simple Interest

Tre just got a part-time job, and his sister recommends he “pay himself first.” What is she talking about? 

• Tre should deposit his check as quickly as possible before taxes can be taken out

• Tre should set aside part of every paycheck for savings before he does any spending

• Tre should spend the money he needs before he lends any to friends or gives to charity

• Tre should start his own business rather than being someone else’s employee

What is the formula for simple interest?

• A=P(1+r)^t
• I=Prt
• I=P(1+r)t
• A=Prt

What does it mean if a person lives paycheck-to-paycheck?

• They use their entire paycheck to cover monthly expenses and have very little money saved

• Their income varies month-to-month and they save a large portion of their biggest paychecks

• They use direct deposit, so their paycheck is automatically split between their checking and savings accounts

• They have high-paying jobs, so don’t have to worry about how much is in each paycheck

Saving money is a good thing.

• True

• False

The majority of Americans...

• Have an adequate emergency fund and have enough saved for retirement

• Have an adequate emergency fund but do NOT have enough saved for retirement

• Do NOT have an adequate emergency fund but have enough saved for retirement

• Do NOT have an adequate emergency fund and do NOT have enough saved for retirement

What does the P in I =PRT mean?

• Power

• Principal

• Product

• Percent

Why do people save money?

• To buy gold.

• People save money so that they can buy things they need or want in the future.

• To have fun.

• To give to their children.

You should spend money on things that you need.

• No, you spend it on things you want only.

• Yes, you spend money on things you need.

Write the percent as a decimal. 
4.3%

• 4.3
• .43
• .043
• 4300

Find the simple interest earned for principal of $2,000 at and 8% rate for 5 years.

• $160

• $800

• $80,000

• $16