Business Math Chapter 3 Vocabulary

What is an annuity?

• A series of equal payments made at regular intervals of time

• A one-time payment made at the end of a period

• A payment made only during holidays

• A payment made randomly throughout the year

What does an Automatic Teller Machine (ATM) allow you to do?

• Withdraw or deposit money without a teller's help

• Only deposit money with a teller's help

• Only withdraw money with a teller's help

• Transfer money between accounts with a teller's help

What is a bounced check?

• A check that cannot be paid due to insufficient funds

• A check that is paid twice by mistake

• A check that is paid in cash

• A check that is paid with a delay

What is a canceled check?

• A check that the bank has paid and marked so it can’t be used again

• A check that is returned to the issuer

• A check that is lost in the mail

• A check that is voided before being issued

What is compound interest?

• Interest on the original principal and on interest added to the principal

• Interest calculated only on the original principal

• Interest calculated on a fixed amount annually

• Interest calculated only at the end of the term

What is the term for transferring funds by a company directly into their employees’ bank account without writing any checks?

• Electronic Funds Transfer (EFT)

• Direct Deposit

• Online Banking

• Overdraft Protection

What does the Effective Rate Of Interest represent?

• The nominal interest rate

• The rate you actually earn by keeping your money on deposit for one year

• The rate charged by the bank for loans

• The rate before taxes are deducted

Which term describes when funds are withdrawn from one account and deposited into another using computers?

• Direct Deposit

• Online Banking

• Electronic Funds Transfer (EFT)

• Overdraft Protection

What is the Future Value of an Annuity?

• The initial deposit amount

• The amount of money in an account after a series of equal payments are made to it, including interest earned

• The amount of money after taxes

• The amount of money before any payments are made

What does the term "Gross" refer to in financial terms?

• The amount after deductions

• The amount before anything is deducted

• The net amount

• The amount after taxes