JA Financial Literacy: Theme Two

What is the main difference between a bank and a credit union?

• Banks exist to make a profit; credit unions re-invest profit to benefit members.
• Banks offer higher-yield interest rates than credit unions.
• Unlike banks, credit unions do not have online banking.
• More services are offered by banks than by credit unions.

Sasha needs a bank that is open 24/7 and accessible overseas. Which bank should she choose?

• Local credit union
• Internet bank
• International financial institution
• Savings and loan

Why are higher-interest checking and savings accounts preferable?

• They give you more checks.
• They hold and transfer money and offer different ways to pay.
• They speed up your rate of return.
• They take longer to earn you additional money.

Which of the following is not a method of payment using a checking account?

• EFT
• Debit card
• Credit card
• Personal check

Adding a fixed amount to your savings each month to have in case of emergency or to save for the future is called:

• Pet insurance fund
• Paying yourself first
• A slush fund
• 401k retirement fund

If $500.00 is placed in a savings account paying 10 percent per year compounded annually, what will the account balance be at the end of the year?

• $550.00
• $552.36
• $505.00
• $600.00

The highest-value alternative given up when a choice is made due to scarcity is:

• Opportunity cost
• Scarcity cost
• Discretionary cost
• Second best

The Rule of 72 is a method to determine:

• The annual interest rate
• How many months it will take to save the target amount
• The time it will take an amount to double in value
• The initial amount you should invest

How is a person’s net worth determined?

• It is a projection of their lifetime earnings.
• It is their net income multiplied by their annual percentage rate.
• It is their total assets combined with the amount in their bank accounts, minus debts.
• It is their monetary net worth divided by their debts.

What is the purpose of a transaction register?

• To record checks that have been written
• To keep a running balance of your bank account
• To keep track of all your deposits, payments, and purchases
• All of the above