Fin Lit Mod 2 DBA

What is the difference between a checking and a savings account?

• Savings is best for paying frequent bills while checking is usually interest based

• Checking is best for paying frequent bills while savings is usually interest based

• These account types are the same

• Savings has a debit card while checking does not

What is a 401k?

• This is a retirement account that all employers offer

• You have to apply for a 401k at a bank

• This is a retirement account that some employers offer

• A 401k has to do with the stock market

What incentives do employees give for funding a 401k?

• They will give you health insurance for free

• They will match what you save up to a certain percentage

• They will use that money to give you more vacation time

What type of interest is better when saving?

• Simple Interest because compound interest isn't as beneficial

• Compound Interest because it builds on itself

What is a "return" when it comes to money earned saving?

• Money owed to the bank

• The original amount we deposited

• The money earned in the transaction

What is deducted in the Real Rate of Return?

• All Interest

• Any fees

• Any fees, taxes and inflation