Topic Test Answers

Barry wants to open a checking account. He wants online services, and a debit card. He is looking at the following tables of fees from his employer's credit union, EECU, and a local bank, E-town Bank: Based upon past experience, Barry expects no overdrafts. He expects no 2nd copies of statements. Barry estimates that he will use network ATMs about 5 times a month with either bank. Barry decides in the end to choose EECU. Assuming that both banks provide the necessary services equally well, and based upon the tables of fees given above, how much can Barry reasonably expect to save annually by choosing EECU in this case over E-town bank?

Tara and Levi are trying to decide between homeowners insurance policies offered by two different agencies. AAA Insurance has offered to insure their home for an annual premium of $0.38 per $100 with a $500 deductible. Thompson’s Insurance has offered to insure the same home for an annual premium of $0.26 per $100 with an deductible of $1,000.Insurance CompanyAnnual Premium (per $100)DeductibleAAA Insurance$0.38 $500 Thompson's Insurance$0.26 $1,000 The house Tara and Levi purchased is valued at $425,000. Which of the following statements accurately describes the difference between the two plans?

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Zach is looking for a homeowners insurance policy for his new house. AAA Insurance company has offered him a plan that insures his home annually for $0.36 per $100 of value in the home. In order to make calculations easier, Thompson’s Insurance lists their annual homeowners insurance premium a bit differently, at $3.63 per $1,000 of value in the home. Zach’s house is worth $289,000. What should Zach be thinking as he chooses between the two insurance companies?

Read the excerpt from chapter 8 of The Strange Case of Dr. Jekyll and Mr. Hyde.Poole felt in his pocket and handed out a crumpled note, which the lawyer, bending nearer to the candle, carefully examined. Its contents ran thus: "Dr. Jekyll presents his compliments to Messrs. Maw. He assures them that their last sample is impure and quite useless for his present purpose. In the year 18—, Dr. J. purchased a somewhat large quantity from Messrs. M. He now begs them to search with most sedulous care, and should any of the same quality be left, forward it to him at once. Expense is no consideration. The importance of this to Dr. J. can hardly be exaggerated.” So far the letter had run composedly enough, but here with a sudden splutter of the pen, the writer’s emotion had broken loose. "For God’s sake,” he added, "find me some of the old.”Read the excerpt from chapter 10 of The Strange Case of Dr. Jekyll and Mr. Hyde.My provision of the salt, which had never been renewed since the date of the first experiment, began to run low. I sent out for a fresh supply and mixed the draught; the ebullition followed, and the first change of colour, not the second; I drank it and it was without efficiency. You will learn from Poole how I have had London ransacked; it was in vain; and I am now persuaded that my first supply was impure, and that it was that unknown impurity which lent efficacy to the draught.

Having a savings account can contribute to a person’s overall financial well-being. Which one of the following is NOT a benefit of maintaining a savings account?

Manny has just filled out his deposit ticket for his savings account. He hands it to the teller and the teller hands it back to Manny. The teller explains to Manny that the deposit ticket cannot be accepted in its current form. What must Manny do to the deposit ticket in order for the teller to process the deposit ticket?

In many cases, lenders allow homeowners to include their homeowners insurance premium with their monthly mortgage payment. Tim’s home is worth $279,500. If his homeowners insurance premium is $0.33 per $100, how much is added to his monthly mortgage payment for insurance?

Roberta's monthly bank statement says that she has a balance of 386.29, but Roberta's check register says that her balance is 370.77. Which of the following are still outstanding?I. A $78.17 check to the electric companyII. A $16.15 deposit from Roberta's roommateIII. A $22.67 check to the grocery storeIV. A $62.65 deposit from Roberta's tax return

Rudy has been paying an annual homeowners insurance premium of $1,106.30 ($0.37 per $100 of value) since he first purchased his house. For the past six months, Rudy has completed some major improvements to his house to improve its overall value. If Rudy successfully adds $50,000 to the value of his house, what will his new annual homeowners insurance premium be?

Faye’s bank charges her a $2.25 service fee every time she uses an out-of-network ATM. If Faye uses an out-of-network ATM twice a week, how much money does she pay in service fees every year?

Which of the following items may be a good consideration in selecting a bank?I. The bank sends a representative to the local mall to promote new applications.II. Number of ATMs or bank branches near where you live, shop, work, or travel.III. Knowledge of personal usage habits and needs.

Richard’s checkbook register as of 02/19:Check #DateDescription of TransactionPayment/Debit (-)Fee (-)Deposit/Credit (+)Balance 02/03Deposit $900.00$900.00 02/05Deposit - Paycheck $390.36$1,290.3620102/05Blue Sky Apartments$455.00 $835.3620202/07Renter’s Insurance$125.40 $709.9620302/18Online Clothing Purchase$155.44 $554.52 02/19 Deposit - Paycheck $390.36$944.88 Enter the following transactions into Richard’s checkbook register and state his ending balance:DateTypeDescriptionAmount03/01Check #204Blue Sky Apartments$455.0003/05DEPPayroll automatic deposit$390.3603/08DebitBenny’s Hamburgers and Fries$9.2003/15Check #205Car payment$251.5903/19DEPPayroll automatic deposit$390.36

Which of the following is something that should not be a consideration when choosing a health care plan?

Sue’s bank account has a balance of $899.83 before she starts spending money. She makes the following transactions:TransactionCost ($)Rent353.76Video game32.79Bike maintenance60.26Jacket55.62Rug80.40Night out35.77Sue is considering splitting the cost of a new TV with her roommate. Her share would be $305.22. Can Sue afford this?

Stephen used a reconciliation worksheet, but his checkbook balance does not match the final worksheet balance. Evaluate the following list of possible errors that he has made. Decide which items could potentially correct this problem if found and corrected. Item numberName of potential errorExplanation of what to verifyIClearing the checkbookAll the transactions on the statement that match transactions in the checkbook should be marked as cleared in the checkbook.IICorrecting checkbook omissionsAll transactions on the statement that were not found in the checkbook should have been entered into the checkbook.IIIOutstanding credits and debitsVerify that the sum of outstanding credits and the sum of outstanding debits are correct.IVMathVerify that all addition and subtraction has been done correctly and there are no transpositions of numbers.VPrevious reconciliationVerify that the previous reconciliation was performed correctly, and that all cleared items are marked as such in the checkbook.Choose the option below that correctly describes the items that could have caused this problem with Stephen’s reconciliation.

Why is simple interest useful for planning parts of your financial future?

Which of the following statements best describes the difference between a health maintenance organization (HMO) and a preferred provider organization (PPO)?

Gerald would like to add a dental and vision option to the health insurance plan he purchased through his employer. In addition to the 65% of Gerald’s $345 monthly health insurance premium, his employer has offered to pay 50% of a $38 monthly dental premium and 75% of a $23 monthly vision premium. If Gerald adds both the dental and vision options to his insurance plan, how much will he pay each month towards health insurance?Soopergood InsuranceOptionMonthly PremiumEmployer ContributionHealth Insurance$345 65%Dental$38 50%Vision$23 75%

Liam uses checks and a debit card, but does not always write all the transactions in his checkbook register. He has lost track of his checkbook balance. Liam looks up the “available balance” using online banking, and writes it on the next line as his new checkbook balance available to spend. What is wrong with Liam’s method?