Savings Test Review

1) What should you consider when choosing a savings account?

• How much are the interest rate and fees?

• Is this your family bank?

• Do your teachers use this bank?

• Does your favorite singer use this bank?

2) "Pay yourself first"? means...

• Pay your credit card bill before your cell phone bill.

• .Any time you get paid, set aside some portion to save before you do any spending

• Buy what you want and save the rest

• Loan money to friends and family, then save 20% of the rest.

3) Which of the following is an example of a long-term savings goal?

• Saving for dinner and a movie

• Saving for a new backpack for school

• Saving for a new pair of crocs

• Saving for a car in five years

4) Arnold typically walks 10 dogs per month and earns $20 per walk. He spends money throughout the month on things like snacks, tickets to high school football and basketball games, and new video games. Somehow, he ends every month with only a few dollars left. Which behavior change is MOST likely to help Arnold save more money?

• Spend less time cutting grass and more time saving money
• Ask his parents for an allowance and try to save that money instead
• Spend money on a better lawn mower so he can cut more grass

• Before he spends, set aside $5 to save out of every $20 payment

5) Paul's school offers an overnight trip to Disney World for all 7th grade band students. Even though the trip is 10 months in the future, he knows he wants to attend and that he should start saving now. If the trip costs $600 total, how much does he need to save per month to have enough?

• $20 per month
• $25 per month
• $60 per month

• $600 per month

6) Doris makes $300 per month by babysitting her neighbor's kids after school. She wants to buy her dad something really special for his birthday, which is 10 months away. Which strategy will work best to make sure she has enough saved by then?

• Wait until the month of her dad's birthday and worry about it then.

• Save $300 every month without spending anything on herself

• Apply for a credit card so she can charge the gift now and pay in 10 months.

• Figure out how much the gift will cost and divide that number by 10 and save that amount each month.

7) Why do you want to make sure your bank is FDIC insured?

• If you have money in your checking or savings account and the bank goes out of business, you are guaranteed to get your money back up to a certain limit

• Buying health insurance through the bank is the best way to go.

• If the bank goes out of business you only have to pay $50.

• If your house catches on fire, the bank pays for you to stay in a hotel.

8) What is the principal in an interest calculation?

• Mr. Whitehair

• The rate of interest applied

• The original amount of money deposited

• The total amount in the account after interest

9) What is a DISADVANTAGE of using a savings account instead of a checking account?

• Savings accounts pay interest.

• Banks required that you open a credit card account if you want a savings account.

• Savings accounts have high fees and checking accounts have NO fees

• Your savings account has a limit of 6 withdrawals per month, while your checking account does not

10) What is the formula for calculating simple interest?

• E=MC squared

• Interest = Principal - Rate - Time

• Interest = Principal x Rate x Time

• Interest = Principal x Rate - Time