Unit 4 Accounts

What are the main differences between a checking account and savings account? (Look at the table on page 35 of your packet)

• You can order and write checks on a checking account. Checking accounts earn less interest than savings accounts.

• It is not a good idea to save money.

• You can write bad checks with a checking account and get arrested.

• I don't know.

When you put your money into a checking or savings account, the bank will pay you a small amount of money each month. What is this payment called? (see packet page 33)

• interest

• a bribe

• hush money

• a loan

What is the simple interest formula? (see packet page 35)

• I=PRT

• loan fees and interest added together

• V=d/t

• V/A

How do you build a "nest egg?" (see packet page 37)

• save money over a period of time for use in the future

• buy some chickens

• spend money recklessly

• overdraw your checking account

How much interest is earned in a year if you deposit $500 into a savings account that earns 5% interest? (see packet page 33)

• $25.00

• $50.00

• zero

• $2.50

Which deposit account earns the most interest? (see packet page 39)

• savings

• checking

• money market

• certificate of deposit

Suppose you deposit $100.00 into a savings account that pays 5.25% interest. How much interest will be paid per year? (see packet page 33)

• $5.25

• $0.43

• $0.00

• $52.50

Suppose you deposit $1,000.00 into a savings account that pays 5.25% interest. How much interest will be paid per month? (see packet page 33)

• $52.50

• $4.37

• $525.50

• $0.00

Suppose you deposit $500.00 into a savings account that pays $5.25% interest. How much will interest will be earned in three (3) years? (see packet page 36)

• $78.75

• $7.87

• $0.00

• $787.75

Which type of savings account requires you to keep the money in the account for a set amount of time? This account pays the highest interest rate. (see packet page 39)

• Money Market Account

• Certificate of Deposit

• Stack your cash in a safe deposit box at your bank

• I don't trust banks. I will hide money in my refrigerator