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?

The same amount of principal is invested in different accounts earning the same interest rate. Which of the following accounts would have the greatest accumulated value at the end of one year?

A principal of $5,350 is placed in an account that earns 3.5% interest. If the interest is compounded annually, how much money will be in the account at the end of 4 years?

Which of these can be considered “online banking?”I. A brick-and-mortar bank that allows its customers to transfer money online.II. A bank that has only a few branches but has customers depositing money online.III. A bank that does not exist as a real building, but only has an internet presence.

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 the formula I=P·r·t, what does r stand for?

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?

Orlando invested $16,000 in an eight-year CD bearing 6.5% simple annual interest, but needed to withdraw $3,500 after five years. If the CD’s penalty for early withdrawal was one year’s worth of interest on the amount withdrawn, when the CD reached maturity, how much less money did Orlando earn total than if he had not made his early withdrawal?

Mary and Lewis each open a savings account at the same time. Mary invests $3,700 in an account yielding 3.2% simple interest, and Lewis invests $3,000 in an account yielding 5.9% simple interest. After fifteen years, who has the greater total amount of money, and how much greater is it?

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

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

In 2007, the FDIC’s insurance limit was $100,000 per person per bank. Approximately 62% of Gil’s deposits were insured by the FDIC. Which of the following was a possible setup for Gil’s deposits?

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?

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?

Rate the following bank accounts from most to least liquid: CD, savings account, checking account, money market account.

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

Approximately how much principal would need to be placed into an account earning 3.575% interest compounded quarterly so that it has an accumulated value of $68,000 at the end of 30 years?

In the formula I=P·r·t, what does P stand for?

Maggie has $14,100 to invest, and wishes to gain $4,000 in interest over the next eight years. Approximately what is the minimum simple interest rate Maggie needs to reach her goal?