Unit 2 Test Review

Interest can be defined as:

• a charge for lending money

• the amount owed for borrowing money

• the amount added into your savings account when opening a bank account

• a charge for convenience of accessing money in your bank

An APR of 25.99% in decimal form is....

• .02599

• .2599

• 2.599

• 25.99

What is Compound Interest?

• State farm and Geico

• Interest associated with the bank account.

• Business of protecting money for others.

What is rule of 72?

• Personal Loans, Auto Loans, Student Loans, Mortgage Loans, Payday Loans

• Take a number and divide it by the interest rate you hope to earn.

• Tax anticipation loans

What is the advantage of a Credit Union?

• Provide a good organization

• Better Loans

• Lower fees then banks

What is a Credit Union?

• They Accept Deposits, Make Loans, and provide a wide array of other Financial services

• A savings account where you put your money you wanna save for something new.

What is Overdraft Protection?

• Optional service that prevents the rejection of charges to a bank account

• Allow homeowners to barrow against the equality in their homes

• Barrows in applying for a loan

How does Overdraft Protection work?

• Charge to the original terms of your mortgage loan

• The bank will automatically move funds you have available in another linked account to the overdrawn account

• 3 page form that you receive after you apply for the mortgage

What is the definition of reconciling a checking account mean?

• Paper document that looks a lot like a regular cheque

• 9 digit code used by financial institutions to identify other financial institutions

• Account process that compares two sets of records to check the figures are correct

What would happen to a monthly payment if the interest rate increased?

• The payment would go up.
• The payment would go down.
• The payment would remain the same.
• None of the above.