WorksheetsSavings Unit Semester Exam Review
Total questions: 20
Worksheet time: 10mins
Juan saved $1,000 from his summer job cleaning pools. Which of these savings vehicles would work best for him if he doesn't need access to the money for a number of years AND wanted to earn the highest interest rate?
Regular savings account
Money Market account
Checking account
Certificate of Deposit
Which of these statements about saving are correct?
People often believe they are saving when they buy products at a listed discount, even if they didn't need the product in the first place.
It is extremely difficult to open a savings account, as you typically need at least $10,000 for your initial deposit.
Without a separate savings account to pay yourself first, it's more likely that you'll spend all of your income each month.
Billions of dollars are spent on marketing to persuade consumers to spend money instead of saving it.
You are 18 years old, opening your
first savings account, and are considering three options: BANK A is not FDIC insured, has an interest rate of 5%, and a minimum deposit of $25. BANK B is FDIC insured, has an interest rate of 0.01%, and a minimum deposit of $50. BANK C is FDIC insured, has an interest rate of 0.02%, and a minimum deposit of $10,000. All three have fees competitive with other banks. Which bank is the best option?
A
B
C
All 3
When a bank says their savings account earns 1% interest, that typically means you will earn 1% interest over what period of time (Note: this is not referring to the compounding frequency or frequency of interest payment)?
Daily
Monthly
Qarterly
Annually
Which of the following is an effective strategy for personal saving?
Wait until the end of the month and
save whatever is left in your checking account
Save a certain percentage of each
paycheck and deposit it directly into a savings account
Cover all of your wants and needs
and save whatever is left over
Take out a payday loan so you can
save before you receive your paycheck
Joelle wants to have an emergency fund to cover 6 months of her expenses. Her monthly gross pay is $4,000 and her monthly expenses are $2,000. If she plans to save 10% of her gross pay each month, how long will it take her to build her emergency fund?
3 months
9 months
24 months
30 months
Which of the following statements about banks is FALSE?
If it is FDIC-insured, your money is safe even if the bank fails
Many banks pay interest on the money you deposit with them
Historically, savings accounts earn higher returns than investments in the stock market
Money in a bank is usually easy to access via ATM, debit card or check
You want to take earnings from your part-time job to pay for a new laptop. Your monthly take-home pay is $500 and the laptop costs $1,200. What percentage of your pay do you need to save in order to buy the laptop in 12 months?
5%
10%
15%
20%
Which of these account types allow you to write checks from the account?
Checking accounts only
checking and online savings accounts
checking and money market accounts
checking, online savings accounts, and money market accounts
You are developing a savings plan and using short-, medium-, and long-term goals to motivate you. Which
represents possible goals from short-term to long-term? Save for…
Retirement, a house down payment, college tuition
A new cell phone, college tuition, a house down payment
A new cell phone, dinner with friends this weekend, a new bike
Retirement, college tuition, a vacation
What is the 50-20-20 rule, respectively?
50% of income goes towards needs, 20% goes into savings, 30% goes to everything else
50% of income goes towards wants, 20% goes into needs, 30% goes to savings
50% of income goes towards savings, 20% goes into wants, 30% goes to everything else
50% of income goes towards wants, 20% goes into savings, 30% goes to everything else
Which statement best describes the difference between saving and investing?
Saving is done with small amounts of money, and investing is done with large amounts of money
Saving protects your money from inflation while investing does not protect your money from inflation
Saving is for low-income people,
while investing is for rich people
Saving goes into an FDIC insured bank while investing typically goes into stock or bond markets
Which represents the best time to start saving for your retirement?
As soon as you graduate and have your first full-time job
Right after you pay off your student loans
Once you are debt-free, including paying off all credit cards, auto loans, and your mortgage
Once you are debt-free, including paying off all credit cards, auto loans, and your mortgage
Which of the following statements is TRUE?
The majority of Americans have an adequate emergency fund.
The majority of Americans have sufficient amounts of money saved for retirement.
The majority of Americans have an adequate emergency fund, but do NOT have sufficient amounts of money
saved for retirement.
The majority of Americans do NOT have an adequate emergency fund or sufficient amounts of money saved for
retirement.
Why is investing a better option than saving when it comes to planning for retirement?
Investing usually has lower interest rates, so it offers a better deal
Investing is guaranteed to produce the large sum of money needed for a happy retirement
Investing begins as soon as you open a bank account, so you can start early in life
The stock market historically has returns higher than the rate of inflation, so your money can actually grow
Experts recommend that you accumulate enough to cover 3 to 6 __________________ of expenses in your emergency fund.
Days
Weeks
Months
Years
What is meant by the term “impulse shopping?”
Comparison shopping for more expensive items while doing less work to compare cheaper products
Buying an item without giving it much thought, maybe because it’s on sale or you see it and simply love it
Using your emergency fund, rather than your checking account, to make a purchase
Shopping online instead of in stores
Which of these is an example of "Keeping up with the Joneses?"
Buying new sneakers the day they come out, because you know others in your class will have them, too
Applying to the top colleges, to see if you'll get accepted & what financial aid packages they'll offer
Saving for retirement as soon as you graduate college, to take advantage of compounding interest
Buying plane tickets for vacation well in advance so that you'll benefit from cheaper prices
Your sister Reagan has her paycheck direct deposited into her checking and savings accounts each pay period. She asks you how she should split her paycheck between the two accounts. What is the best advice you could offer her to encourage her savings habit?
Direct deposit the full amount of the check each month into her checking account and then decide later how much to put into savings
Add at least 95% of her paycheck to her checking account and 5% to her savings account because you know that saving is hard for her
Add at least 10-20% of her paycheck to her savings account and the remaining 80-90% to her checking account
Do not have her paycheck direct deposited since it is NOT a secure way to transfer money
Which of these lists ranks the savings options from highest expected interest rate to lowest expected interest rate?
Online savings account, 5-year CD, Savings account at traditional bank, 10-year CD
Savings account at traditional bank, online savings account, 5-year CD, 10-year CD
Savings account at traditional bank, online savings account, 10-year CD, 5-year CD
10-year CD, 5-year CD, Online savings account, Savings account at traditional bank
