WorksheetsSaving & Retirement
Total questions: 25
Worksheet time: 59mins
In general, a deposit of up to ________ in a bank account is guaranteed against loss.
$100,000
$250,000
$500,000
$750,000
The Federal Reserve stimulates the economy or slows it down by ________.
controlling the market rate of interest
manipulating the stock market
offering a discount rate to individual borrowers
manipulating the money supply
Which of the following is the speed with which you can convert an asset to cash without significant loss of value?
Liquidity
Interest
Principal
Annuity
Banks use depositors' money to make money through interest charged on loans.
True
False
Interest rates tend to move up or down along with rates controlled by the Federal Reserve, such as the discount rate.
True
False
Shiva deposited $1,500 in a savings account that pays 2.76 percent in annual interest. If Shiva does not make any withdrawals or deposits, how much interest will Shiva's account earn by the end of one year?
414
$41.40
1541.4
4140
The most liquid type of bank account is a ________ account.
savings
NOW
money market deposit
basic checking
The money put into a(n) ________ account is referred to as a demand deposit.
money market
IRA
certificate of deposit
checking
Which of the following typically pays a higher rate of interest than a NOW account but a lower rate of interest than a certificate of deposit?
)An individual retirement account
A savings account
A basic checking account
A money market deposit account
Which of the following is NOT a common CD maturity?
Two weeks
One month
Six months
Three years
Which of the following is a major difference between credit unions and other depository financial institutions?
A credit union is a nonprofit organization.
A credit union typically has greater expenses.
Other depository financial institutions exist to serve their members rather than investors.
Other depository financial institutions typically pay higher interest rates on deposits.
The APY takes the ________ into account.
compounding frequency
market interest rate
discount rate
variable annuity
Explain some advantages and disadvantages of a money market deposit account in comparison to a NOW account.
Anu purchased a 1-year $2,000 CD that pays 3.3% annually. Assuming that all of the interest earned is added at year's end, how much will the CD be worth at its maturity date?
$6,600
$2,660
$2,066
$2,033
Which of the following would be the best way to save to achieve a short- or intermediate-term savings goal?
A traditional IRA
A Roth IRA
A 401K
A CD
You can withdraw IRA funds without penalty beginning at age ________.
Any time you need them
45
59.5
62.5
When a contribution to an account is ________, the depositor does not pay federal income tax on the amount deposited in the account.
tax deferred
tax deductible
employer-sponsored
vested
When the interest earned on an account is ________, the depositor does not pay taxes on the earnings until they are withdrawn from the account.
tax deferred
tax deductible
fixed
variable
In 2020, the limit an individual under the age of 50 could contribute to a(n) ________ was $6,000
annuity
traditional IRA
defined-benefit plan
defined-contribution plan
Of the following, who would be most likely to use a SEP-IRA?
A full-time employee
An employer
A self-employed person
A retiree
A defined-benefit plan is also known as a(n) ________.
annuity
pension
401(k) or 403(b)
403(b)IRA
401(k)s and 403(b)s are both types of ________.
annuities
defined-contribution plans
defined-benefit plans
IRAs
A(n) ________ is a type of financial product that guarantees yearly payments to the owner for a fixed period of time or for the owner's lifetime.
401(k) or 403(b)
IRA
pension
annuity
How does the federal government encourage individuals to save money in IRAs? What restrictions does the government place on IRAs to encourage use of these funds for retirement?
Early in their careers, some individuals choose not to contribute to a 401(k) or other defined-contribution plan because they feel they cannot afford to begin saving for retirement yet. Briefly explain two disadvantages of opting not to contribute to a 401(k) early in your career.
