2024 Math IV 1st Quarter Exam

1. 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

2. Which of these statements about savings is incorrect?

• People often believe they are saving when they buy products at a listed discount, even if they didn't need the product in the first place
• It is extremely difficult to open a savings account, as you typically need at least $10,000 for your initial deposit
• Without a vehicle to save (like a savings account), it's much easier to spend and harder to keep track of finances
• Billions of dollars is spent on marketing to persuade consumers to spend money instead of saving it

3. Jeremy is a 17-year-old junior in high school and just started his first job. He wants to open a savings account. Which of these will he need to bring to the local bank branch in order to start an account?

• A letter from his school
• A letter from his parents
• An adult cosigner because he is under 18
• An adult cosigner because he is still a student

4. All three have fees competitive with other banks. Which bank is the best option?

• Bank A
• Bank B
• Bank C
• All 3 banks are equally good options

5. When a bank says their savings account earns 1% interest, that typically means you will earn 1% interest over what period of time?

• Daily
• Monthly
• Quarterly (three months)
• Annually (a year)

6. You open a new bank account at Eastside Savings. You see FDIC stickers around the bank, and the teller specifically mentions that Eastside Savings is "FDIC insured". A few months later, you hear on the radio that Eastside Savings is struggling to stay in business. Your savings balance is $500. What would happen to that money if Eastside Savings failed?

• You would receive all the money you have deposited at Eastside Savings since FDIC insurance covers accounts up to $250,000.
• You could lose $250 since FDIC insurance only covers 50% of the money you have deposited.
• You would lose all of your money.
• You would receive $250,000 since FDIC insurance provides each account at the bank with $250,000 regardless of how much they have deposited.

7. Which of the following is an effective strategy for personal saving?

• Wait until the end of the month and save whatever is left in your checking account
• Save a certain percentage of each paycheck and deposit it directly in a savings account
• Cover all of your wants and needs and save whatever is left over
• Take out a payday loan so you can save before you receive your paycheck

8. What would be a good time to spend money from your Emergency Fund?

• You lose your job but still have bills to pay
• Your friend tells you that you should buy as much Bitcoin as possible
• Your favorite artist releases a new album and you just have to buy it
• Your friends are going on an expensive trip and you would like to go with them

9. Joelle wants to have an emergency fund to cover 6 months of her expenses. Her monthly gross pay is $4,000 and her monthly expenses are $2,000. If she plans to save 10% of her gross pay each month, how long will it take her to build her emergency fund?

• 3 months
• 9 months
• 24 months
• 30 months

10. Which of the following statements about banks is FALSE?

• If it is FDIC-insured, your money is safe even if the bank fails
• Many banks pay interest for the money you deposit with them
• Historically, savings accounts earn higher returns than investments in the stock market
• Money in a bank is usually easy to access via ATM, debit card or check