Money Matters Ch 5 Review

A canceled check serves as proof of payment for bills or purchases.

• True

• False

The payee is the person whom the check you are writing is going to, also known as "Pay to the order of."

• True

• False

You should reconcile your bank statement at least once a year.

• True

• False

Savings accounts at banks are generally insured by the FDIC up to the legal limit of $250,000 per deposit per bank.

• True

• False

Online banks are not subject to the same laws and regulations as traditional banks.

• True

• False

When a check bounces, the person or business who deposited it is charged a fee.

• True

• False

A smart card

• Can only be used to make withdrawals and deposits at ATMs

• Has all the same protections as a Credit Card

• Has a computer chip with electronic money, so if your card is stolen, your bank account can not be accessed

• Can not be used to make online purchases

When interest is earned on the principal, then added back to your account balance and then interest is earned again, this is called__________.

• Interest Expense

• Compound Interest

• Simple Interest

• Imputed Interest

Using the Rule of 72, if you can invest your money at 10% interest, how long will it take you to double your investment amount?

• 5 years

• 7.2 years

• 6 years

• 8.5 years

Overdraft protection, often for a small fee, helps you avoid

• ATM fees

• NFS fees

• Inactive account fees

• Monthly service fees