Knowledge Check: Financial Institutions and Accounts

• $600

• $700

• $800

• $500

If a savings account offers an annual interest rate of 4%, what is the interest earned on a balance of $1,000 after one year?

I = P*r*t

• $40

• $50

• $60

• $70

Which type of account typically offers the highest interest rate?

• Checking account

• Savings account

• Certificate of Deposit (CD)

• Money market account

A loan of $5,000 is taken out with an annual interest rate of 5%. What is the total amount to be repaid after one year?

• $5,250

• $5,500

• $5,750

• $6,000

Which of the following is NOT a type of bank account?

• Savings account

• Checking account

• Credit account

• Investment account

If a bank statement shows a balance of $1,200 and a pending transaction of $150, what is the available balance?

• $1,050

• $1,200

• $1,350

• $1,150

Calculate the simple interest on a loan of $2,000 at an interest rate of 3% per year for 2 years.

I = P*r*t

• $60

• $120

• $180

• $240

Which account type is best suited for everyday transactions?

• Savings account

• Checking account

• Certificate of Deposit (CD)

• Retirement account

Which type of account is typically used for long-term savings with tax advantages?

• Checking account

• Savings account

• Retirement account

• Money market account

A borrower is comparing two loan options: one with a 4% interest rate and another with a 5% interest rate. Which loan will result in lower total interest paid over the same term?

• 4% interest rate loan

• 5% interest rate loan

• Both will result in the same interest

• Cannot be determined