Senior Math Semester 2 Final

Which of the following transactions will REDUCE your checking account balance immediately?

• Take out cash using your debit card at an ATM machine

• Use your debit card to pay for groceries at a Point-of-Sale (POS) terminal

• Write a check to pay the rent on your apartment

• Swipe a prepaid card to pay for your fast food purchase

When signing up for a new checking account you answer "No" and opt out of overdraft protection. On this day, you have $10 in your account and go out and use your debit card to buy lunch for $12, a movie ticket for $12 and dinner for $15. What is likely to be the outcome resulting from these transactions?

• Your account will be closed

• You will likely be charged an overdraft fee for EACH transaction and need to repay the bank the funds overdrawn ($29) + interest

• Since you turned down overdraft protection, the bank will not allow you to overdraw your account so your card will be denied in these 3 instances

• The bank will provide you with five days to add funds to your account to cover the overdraft but will not charge you any fees

When you review your monthly checking account statement, which statement below would indicate that you deposited more money than you spent?

• Your previous balance is higher than your ending balance

• Your fees are greater than your starting balance

• Your withdrawals are larger than your fees

• Your ending balance is higher than your previous balance

Which is an advantage of paying your bills using the online bill pay feature with your checking account?

• The company you are paying receives the money on the same day.

• There is typically only a small fee to set-up and use this feature.

• It saves time and paper.

• It eliminates late fees.

Juan saved $1,000 from his summer job cleaning pools. Which of these savings vehicles would work best for him if he doesn't need access to the money for a number of years AND wanted to earn the highest interest rate?

• Regular savings account

• Money Market account

• Checking account

• Certificate of Deposit

Your sister Reagan has her paycheck direct deposited into her checking and savings accounts each pay period. She asks you how she should split her paycheck between the two accounts. What is the best advice you could offer her to encourage her savings habit?

• Direct deposit the full amount of the check each month into her checking account and then decide later how much to put into savings

• Add at least 95% of her paycheck to her checking account and 5% to her savings account because you know that saving is hard for her

• Add at least 10-20% of her paycheck to her savings account and the remaining 80-90% to her checking account

• Do not have her paycheck direct deposited since it is NOT a secure way to transfer money

When a bank says their savings account earns 1% interest, that typically means you will earn 1% interest over what period of time (Note: this is not referring to the compounding frequency or frequency of interest payment)?

• Daily

• Monthly

• Quarterly

• Annually

Which of the following statements is true about this Schumer Box?

• Depending on your creditworthiness, the APR for a borrower will always be 8.99%, 10.99% or 12.99%

• There is an introductory APR that is valid only for 1 year, but then the permanent APR is lower than that at 8.99%.

• You will never be charged an APR higher than 14.99%

• You may be charged an APR as high as 28.99% for a late payment

When taking out a loan, the shorter your term length, the _______ your monthly payments, and the _______ the total interest you will pay.

• higher, lower

• higher, higher

• lower, lower

• lower, higher

What is an advantage of using a credit card?

• It will not affect your credit score or credit history

• Since it is tied directly to your checking account, it prevents you from spending money you do not have

• If you need to carry a balance, the interest rates are generally quite low (less than 5%)

• If you pay off your balances every month in full, it's like getting a short-term interest-free loan