Q1: Which interest should you choose if you want the best rate of return on your interest?

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Felicia Lloyd
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1 Personal Finance Capstone 1 A public quiz for classroom Personal Finance review of Banking, Savings, Payment Types More info Questions (60) Hide all answers Q1: Which interest should you choose if you want the best rate of return on your interest? Annual Compounding Semi-Annual Compounding Daily Compounding Monthly Compounding Q2: To earn the most, open a savings account that earns interest and has the interest rate. compound; lowest compund, highest simple; lowest simple; highest Q3: This account is best to earn the most interest if you won't need access money for a full year. Money Market Account Savings Account Checking Account Q4: Which compounding frequency will earn you the MOST money? Compounding 1 time a year Compounding 4 times a year Compounding monthly Compounding daily Q5: Which of the following actions would enable you to earn MORE interest? 1/12

2 Selecting an account with a high interest rate. Leaving his money in the account for long period of time. Transferring money into his checking account each month. Both A & B Q6: Which of the following is a type of savings vehicle? Certi cate of Deposit Money Market Account Checking Account Both A & B Q7: Interest is a charge for lending money to a bank the amount owed for borrowing money amount added into your savings when opening a bank account charge for convenience of accessing money in bank account Q8: Which of the following is generally true about savings vehicles (SV)? Savings vehicles are only useful for long-term investments. You should evaluate different forms of SV based on needs. Savings vehicles are never insured. All of the above Q9: Which of the following is considered a "need"? Food Pizza Gatorade Fruit Q10: Which of the following is the most important consideration when planning your budget? Budget for your needs before your wants. Budget for unexpected events in before expected expenses. Budget for xed expenses before exible expenses. Budget for expected events before unexpected expenses. Q11: Which of the following savings vehicles usually requires a high minimum balance? 2/12

3 Simple savings account Checking account All of the above Q12: This account typically has very high liquidity, low or no interest, and low minimum balance. Checking Account Money Market Account Investment Retirement Account (IRA) Q13: The purpose of a budget is to: plan how you will spend the money you earn or receive. stop you from spending too much money. increase the balance of your savings account tell you how much you owe the government in taxes Q14: If you overspend and in need of a budget. What type of expense should they reduce next month? Going to the movies with friends. Buy fewer school books. Transportation to get to and from school. Purchasing medicine for their asthma. Q15: Which of the following is considered a "want"? A warm winter coat Shoes Designer Sneakers Socks Q16: What is the typical relationship between time and interest rate? Longer time period usually equals higher interest rates. Shorter time period usually equals higher interest rates. Shorter time periods have no effect on interest rates. Longer time periods have no effect on interest rates. 3/12

4 Q17: You have $300, expect to spend the money in the next few weeks. What account will be best? Money Market Account Savings Account Checking Account Q18: When it comes to saving money, what is a good rule of thumb? Keep most of your savings in your checking account Put aside money for savings each month Choose the savings account with the lowest interest rate Put anything you can t afford on your credit card Q19: Which requires you to pay the lowest amount in interest? Annual Compounding Semi-Annual Compounding Monthly Compounding Daily Compounding Q20: Which of the following is a primary responsibility of the Federal Reserve Bank? Establish monetary policy Collect taxes Write monetary laws Print money Q21: Which type of nancial institution typically has membership requirements? Credit Union Online Commercial Bank Commercial Bank Federal Reserve Bank Q22: Which of the following fees would likely be the highest? Overdraft fee Monthly service fee Account transfer fee ATM fee 4/12

5 Q23: Savings accounts usually offer interest rates than checking accounts. lower higher Q24: Which type of account will typically have the highest interest rate? Checking Account Savings Account Money Market Account Q25: It is to access your money in a savings account than in a checking account. easier harder Q26: Which type of account is the MOST liquid? Checking account Savings account Certi cate of Deposit Exchange Traded Fund Q27: The three parts of the Federal Reserve System are the Reserve Banks, the FOMC, and the: Board of Governors Department of the Treasury United States Mint Secretary of State Q28: The numbers on the bottom of a typical check represent all of the following EXCEPT? Social Security Number Routing number Check Number Account Number 5/12

6 Q29: Which of the following is a unique feature of credit unions? Credit unions are typically owned and run by their members. Credit unions limit membership to certain people or groups. Credit unions offer a wide variety of banking services. All of the above! Q30: Which of the following is not a type of bank? Credit Union Payday lender Online Bank Retail bank Q31: Which of the following represent typical account fees? ATM fee minimum balance fee Service fee all of the above Q32: Which type of account typically has low liquidity? Checking Account Money Market Account Savings Account Q33: What is NOT a responsibility of the Federal Reserve? Supervising reserve banks setting the nation's monetary policy maintaining a stable banking system establishing the federal budget Q34: How often should you typically monitor your checking account? Monthly Yearly Daily Every 3 months 6/12

7 Daily Every 3 months Q35: What s the purpose of balancing or monitoring your checking account? To help calculate how much money you have in your account To keep an estimation of how many checks you write To nd out which checks you have bounced To stop identity theft from occurring Q36: Which of the following is NOT a core component of the Federal Reserve Bank? Board of Governors Federal Open Market Committee Regional Reserve Banks Department of the Treasury Q37: Which of the following accounts will give you the LEAST access to your money? Simple savings account Checking account Cash Q38: What part of a check is the LEAST important? Check number Routing number signature line memo line Q39: What's the best strategy for avoiding ATM fees? Only use ATMs close to your house Only use ATMs in your bank's networks Only use ATMs to withdraw cash Only use ATMs you have used before Q40: With a traditional savings account, you could be charged a fee if: 7/12

8 You deposit too much money at once You open an account online You withdraw money too often You close the account Q41: Which of the following payment types require you to pay upfront? money order cashier's check pre-paid card all of the above Q42: which of the following statements comparing debit cards to credit cards is TRUE? debit cards allow you to draw funds from your checking acct. debit cards typically offer greater fraud protection debit cards never require a signature to nalize a purchase debit cards charge higher interest rates on purchases Q43: Which payment type can help you stick to a budget? credit cards debit cards payday loans cash advances Q44: which payment method typically charges the highest interest rates? credit cards cashier's checks pre-paid cards payday loans Q45: If you carry a large balance on your credit card, which credit card feature is most important? Low APR High annual fees Lots of credit rewards A small credit limit Q46: Making a minimum payment: 8/12

9 means you are paying a small portion of the credit card debt is the same thing as making a late credit card payment will have a negative effect on your credit score will cause your credit card to be cancelled Q47: What is a credit card balance? the amount of interest you must pay the credit card company the required minimum payment to your credit card company A way to track your incoming and outgoing purchases the amount of money you still owe to the credit card company Q48: Which of the following can increase your credit card's APR? paying the minimum missing a credit card payment paying off the full balance cashing in on rewards points Q49: Amount of time you have to pay back a balance before it starts accumulating interest time period grace period credit limit credit balance Q50: When you use a credit card, the money comes directly out of your account. True False Q51: Which of the following is NOT a common credit card fee? late fee annual membership fee balance transfer fee minimum payment fee Q52: Credit cards typically offer more fraud protection than debit cards. 9/12

10 True False Q53: Another name for check card: credit card debit card Q54: you can make electronic purchases that debit the cost of the purch from your checking acct. credit card debit card check Q55: The best way to ensure the accuracy and safety of your accounts is to: Balance your checkbook annually Shred your paper account statements weekly Call your customer service center daily Monitor your online accounts regularly Q56: Which of the following statements about minimum payments is INCORRECT? Minimum payments are only 2% to 4% of your total debt Sending a minimum payment, you will be charged a late fee You will still pay interest if you pay the minimum payment Paying a min means you are paying off a portion of your bal Q57: Which of the following statements comparing debit cards to credit cards is TRUE? Debit cards draw funds directly from checking. Debit cards offer greater fraud protection. Debit cards never require a signature like credit cards. Debit cards have a higher interest than credit cards. Q58: Transactions made with a credit card can impact your credit score. 10/12

11 True False Q59: All of the following are fees typically charged by credit card companies EXCEPT: late payment fee balance transfer fee annual membership fee reload fee Q60: The annual percentage rate on a credit card determines. The amount of interest you are charged The amount your credit limit can go up within a year How many credit cards that you can own None of the above. Resource credits Description: ever.com 11/12

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2. To earn as much interest as possible, you should open a savings account that earns () interest Hide answers

2. To earn as much interest as possible, you should open a savings account that earns () interest Hide answers 1. Interest is? Hide answers A charge for lending money to a bank amount owed for borrowing money amount added into your savings when opening a n account a charge for accessing the money in your savings