Personal Finance Final

What is a bank statement?

• A business that cashes checks and gives the customer cash in exchange for a fee for the service
• Money you put into your account
• The amount of money you have in your bank account
• A monthly document prepared by your financial institution which shows all of the transactions related to your account

A card that is directly connected to your checking account; it enables you to conduct ATM transactions and to make purchases instead of using cash or writing a check is known as a:

• Credit Card
• Secured Credit Card
• Debit Card
• Prepaid Card

An automatic electronic deposit of net pay to an employee's designated bank account is known as:

• Debit
• Direct Deposit
• Overdraft Fee
• Person to Person Payment

Hows does overdraft protection work?

• You will likely be charged an overdraft fee for EACH transaction you make after your account reaches zero.
• The bank will not allow you to overdraw your account so your card will be denied.
• You are only charged an overdraft fee the first time your account is overdrawn
• Overdraft protection prevents all fees.

How is the 50-20-30 Rule used correctly?

• 50% savings, 20% needs/expenses, 30% wants
• 50% wants, 20% savings, 30% needs/expenses
• 50% needs/expenses, 20% savings, 30% wants
• 50% needs/expenses, 20% wants, 30% savings

A bank that is FDIC insured means that:

• Provides no benefits for bank members
• Insures customer deposits if a bank fails up to $250,000 per individual depositor
• Allows members of the bank to add as much money as they want to their bank accounts
• Insures customer deposits if a bank fails up to $500 per individual depositor

Why is it important to have an emergency fund?

• To have money set aside for unanticipated expenses or loss of income
• To be able to buy that new product you really really want
• To use as a downpayment on a large expense
• You do not need an emergency fund, the money in your checking account is good enough

What is a CREDIT CARD?

• A card that is directly connected to your checking account.
• Someone who legally agrees to take responsibility for a person's debt if they cannot repay it
• A card that is directly connected to your savings account.
• A card issued by a financial company giving the holder an option to borrow funds.

What makes up the total payment of a loan?

• Principal + Term + Interst
• Interest + Deductible + Tern
• Principal + Down Payment
• Interest + Expenses

What is the difference between a VARIABLE RATE and a FIXED RATE in terms on interest rates on loans?

• A VARIABLE RATE will stay the same for the life of the loan; a FIXED RATE will change throughout the life of the loan.
• a FIXED RATE will stay the same for the life of the loan; a VARIABLE RATE will change throughout the life of the loan
• Both rates remain the same throughout the life of the loan.
• Both rates change throughout the life of the loan.