Banking - Unit Test

What is NOT a service that a bank provides?

• Easy access—deposit and withdraw money conveniently
• Online management—manage your accounts with your bank’s website or app
• Simple transfers—link your account to a payment app and it’s easy to pay back your friend for those concert tickets
• Access to loans—apply for a credit card or mortgage with your bank
• Purchasing stocks and other investments such as cryptocurrency

Which are TWO ADVANTAGES of having an account at a local community bank versus a national bank?

• Community banks are typically larger and more well-known than national banks.
• Community banks typically have LOWER fees and charges when compared to a national bank.
• Community banks typically have HIGHER fees and charges when compared to a national bank.
• Community banks typically give back and support the local community.

What is an account balance when referring to a checking account?

• The total amount of money a bank has.
• The amount of money in a person's bank account at a specific time.
• The interest earned on a savings account.
• The maximum amount of money you can withdraw from an ATM in one transaction.

What is a bank statement?

• A statement from the government about the economy.
• A document that summarizes a person's financial transactions with a bank.
• A statement from a bank detailing its future plans and investments.
• A notice from the bank about changes in interest rates.

What is a minimum balance?

• The highest balance you can have in your account.
• The average balance of all accounts at a bank.
• The lowest amount of money required to keep an account open or avoid fees.
• The balance required to apply for a loan.

What is overdraft protection?

• A type of insurance for your bank account.
• A service that prevents your account from going negative.
• A program to earn bonus points on your credit card.
• A way to withdraw money from an ATM without a PIN.

What is the mathematical formula that you would use to describe the financial activity on a bank statement?

• Ending Balance = Previous Balance + Deposits + Withdrawals
• Ending Balance = Previous Balance - Deposits + Withdrawals
• Ending Balance = Previous Balance + Deposits - Withdrawals
• Ending Balance = Previous Balance - Deposits - Withdrawals

What is simple interest?

• Interest calculated on the initial principal only
• Interest calculated on the initial principal and any previously earned interest
• Interest that varies based on market conditions
• Interest calculated using complex mathematical formulas

If you invest $100 at a 5% annual interest rate for 3 years, how much simple interest will you earn?

• $100
• $15

• $5

• $3

What type of interest will earn you more money on your savings account?

• Compound
• Simple