Savings Test Reveiw

The Rule of 72 tells us?

• The Rule of 72 estimates the time to double an investment by dividing 72 by the annual interest rate.

• The Rule of 72 calculates the total profit from an investment.
• The Rule of 72 determines the best investment strategy.
• The Rule of 72 is used to find the exact amount of time needed to double an investment.

Which one requires a minimum deposit of $1000 or more and is based on tiered interest rates?

• Certificate of deposit
• Regular savings account
• Savings Bond

• Money market account

An example of a long-term goal is a plan to save towards:

• Buying a new video game

• a house down payment
• Replacing a window

• Saving for new shoes

The money your investment earns is based solely on the principal (your initial investment)

• Compound Interest

• Savings

• Dividend.

• Simple Interest

Which of the following is the most liquid?

• Stocks
• Savings Account

• Bonds
• Certificate of Deposit

What agency provides the protection that depositors have in savings, checking and certificate of deposit accounts as a member of commercial banks.

• Consumer Financial Protection Bureau (CFPB)
• Federal Reserve System
• National Credit Union Administration (NCUA)
• Federal Deposit Insurance Corporation (FDIC)

The chance you take of making or losing money on your investment is known as:

• profit
• risk
• dividend
• interest

An individual can begin collecting Social Security benefits at age 62: however,

• The payments will be lower than if they wait until full retirement age.

• Their spouse will not be eligible to receive Social Security.

• Their payments will stop after 10 years.

• The income tax rates increase exponetially.

What do a 401(k), 403(b), IRA, and a Roth IRA all have in common?

• They are all retirement savings accounts with tax benefits.
• They are all investment funds.
• They are all bank savings accounts.
• They are all types of insurance policies.

What is the primary difference between a 401(k) and and IRA?

• Only employers contribute to A 401(k).

• An IRA is only available to self-employed individuals.
• A 401(k) is employer-sponsored while an IRA is individually acquired.

• A 401(k) allows for tax-free withdrawals at any time.