Financial Institutions and Types of Accounts

In Unit 2: Financial Institutions and Types of Accounts: students will demonstrate an understanding of various forms of financial exchange, including cash, checks, credit cards, debit cards, and electronic funds transfers. Fill in the blanks to make the statement true.

​ (a)   allow purchase without immediate funds. ​ (b)   are convenient, have no interest charges and do not allow you to overspend. ​ (c)   is accepted in-person, can't be used online and maybe unsafe to carry in large amounts.

• Credit Cards
• Debit Cards
• Cash
• Mutual Funds
• Stocks

Match the following:

• credit card

• allows you to borrow money to make purchases, which can be helpful if you don't have the funds readily available

• prepaid credit card

• Cardholders may have a lot of fees, including activation fees, transaction fees, ATM withdrawal fees, reloading fees, monthly fees, or inactivity fees.

• debit card

• a good option if you want to avoid overspending, as you're limited to the amount you have on hand.

• cash

• pulls money directly from your bank account, so you don't have to worry about incurring interest charges

Organize these options into the right categories:

Groups:

(a) Credit Cards Pros

,

(b) Debit Card Pros

,

(c) Cash Pros

• Does not require immediate funds

• Can help build credit score

• Can use online; linked to checking account

• No interest charges

• Helps with budgeting

• Hinders impulse and unnecessary purchases

• Offers consumer protections

• Accepted in-person anywhere

• Avoids overspending; linked to checking account

Rent-to-Own

With rent-to-own agreements, consumers can take home items like furniture, electronics, or appliances, and make weekly or monthly payments on them until they are paid off. Rent-to-own stores usually ​ (a)   require a credit check, which makes them a popular option for people with bad credit. However, consumers should be aware that they usually end up paying much ​ (b)   for items than they would if they bought them outright.

• do not
• do
• more
• less

Store Credit

Many retailers offer store credit (or in-store financing), which lets consumers buy items and pay for them over time. Store credit can come in the form of a line of credit (like a credit card), or an installment plan, where consumers make ​ (a)   monthly payments over a set period of time. For example, if you buy a new TV from a store that offers store credit, you can pay for it in 12 monthly installments. While some stores offer ​ (b)   financing, others may charge interest or fees.

• fixed
• variable
• zero-interest
• high interest

Installment Agreements

An installment agreement is a type of ​ (a)   that lets a consumer buy a product or service and pay for it over time. It is similar to store credit, but it can be used for a wider range of purchases. For example, you might use an installment agreement to buy a car, pay for a medical procedure, or even finance a vacation. With an installment agreement, you agree to make ​ (b)   monthly payments for a set period of time, usually with ​ (c)   .

• contract
• fixed
• interest
• variable
• no interest

Layaway

Layaway is a ​ (a)   arrangement that some stores offer to customers. With layaway, a customer can ​ (b)   an item they want to buy, and make ​ (c)   towards the total cost over time. For example, if you want to buy a TV that costs $500, but you do not have the full amount at the time. With layaway, you can pay for the TV by paying a certain amount each week or month until you've paid the ​ (d)   retail cost. Once you've paid the entire amount, you can take the TV home.

• purchasing
• reserve
• payments
• full
• leasing
• lease
• half the

Match the following payment types to their appropriate description.

a

b

c

d

will have to wait until fully saved up

6 payments of $91.67

will have to wait to take home

pay off in 30 days to avoid interest

At Walmart the cost of a 55" Element 4K HD TV is $388.00 before tax. The cost of a PS5 with a controller is $499.00 before tax. The cost of both together before tax is $887.00. In Texas the cost with tax would be $887(1.0825)=$960.18.

At Aaron's Rent-To-Own you can rent both and pay a weekly fee of $27.69 for 104 weeks. How much money would you save if you bought them vs. renting to own?

Round your answer to the nearest hundredth.

Mathematical Equivalence

ON

At Walmart the cost of a 55" Element 4K HD TV is $388.00 before tax. The cost of a PS5 with a controller is $499.00 before tax. The cost of both together before tax is $887.00. In Texas the cost with tax would be $887(1.0825)=$960.18.

At Aaron's Rent-To-Own you can rent both and pay a monthly fee of $119.98 for 24 months. How much money would you save if you bought them vs. renting to own?

Round your answer to the nearest hundredth.

Mathematical Equivalence

ON