AnswersOK-Algebra II B-CRInvesting

Investing — Unit test Answers

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1
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Look at the table below showing an example of a checkbook ledger.

Question illustration
A
Adrienne forgot to include the $2.00 ATM transaction fee.
B
Adrienne did not use $320.00 as her starting balance.
C
Adrienne deducted $23.50 from her balance instead of $32.50.
D
Adrienne did not enter her ATM withdrawal correctly.
2
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Three friends decide that they each want to be able to buy a new bike in four years. Iliana puts $500 in a savings account with a simple interest rate of 4%. Joann invests $515 in a standard savers account with a simple interest rate of 3%.Cyndy invests $500 in a junior achievers account with a 3.5% compound interest rate.Using the formula for simple interest and for compound interest, who will have the most money to spend on a new bike at the end of the four years?

Question illustration
A
Joann will have the most money, $576.80 for the bike
B
Cyndy will have the most money, $580.00 for the bike.
C
Cyndy will have $576.80, the most money for the bike.
D
Iliana will have $580.00, the most money for the bike.
3

The best way to research an expensive product is to

A
visit multiple company websites.
B
watch many television commercials.
C
make a purchase and test it out.
D
read consumer information magazines.
4

Why were savings and loans (S&Ls) originally established?

A
to help people invest in small businesses
B
to help people save money
C
to help people buy homes
D
to help people invest in the stock market
5

Which are considered types of credit available to borrowers? Check all that apply.personal loansbondscredit cardsmortgagescashauto loansgift cards

A
personal loans
B
bonds
C
credit cards
D
mortgages
E
cash
F
auto loans
G
gift cards
6

At what point should consumers stop researching a product?

w
when the research costs more than the potential savings
w
when they want to make an immediate purchase
w
when the government does the research for them
w
when they know they have waited long enough to buy
7

Which is most likely to happen to consumers with good credit? Check all that apply.They can be approved for loans.They are denied a mortgage.They can receive lower interest rates.They are denied an unsecured loan.They can use credit in emergencies.They are forced into high interest rates.

A
They can be approved for loans.
B
They are denied a mortgage.
C
They can receive lower interest rates.
D
They are denied an unsecured loan.
E
They can use credit in emergencies.
F
They are forced into high interest rates.
8

Melanie invests $4,000 into an account offering 4% interest compounded annually. Gina invests $4,000 into a simple interest savings account offering a 4.5% interest rate. What is the dollar amount of the greater balance at the end of five years? Round to the nearest dollar. Use the formula for compound interest; Use the formula for simple interest.

Question illustration
Answer not available
9

Credit unions differ from retail banks because they are

A
owned by their members.
B
owned by their employees.
C
owned and managed by private corporations.
D
owned by shareholders who purchased stock.
10

Companies report people to credit agencies if they

A
fail to pay their bills on time.
B
borrow too much money.
C
fail to use different types of credit.
D
use large amounts of credit at once.
11

Which best describes the purpose of recording past income and spending in a budget?

A
to know the historic cost of goods
B
to serve as the basis for future planning
C
to learn why having savings is important
D
to learn why expenditures are likely to increase
12

Emma has decided that she needs to assess the risk and return of buying an extended warranty for her new laptop for school. Which of these practical questions should she ask herself to assess the risk? Select three options.Will the warranty cover the cost of any physical damage?Should I buy a different model?Would it be better for me to buy a desktop computer?Is the cost of replacement less than the cost of the warranty?Is the laptop worth the extra expense of the warranty?

A
Will the warranty cover the cost of any physical damage?
B
Should I buy a different model?
C
Would it be better for me to buy a desktop computer?
D
Is the cost of replacement less than the cost of the warranty?
E
Is the laptop worth the extra expense of the warranty?
13

Through the successful study of personal finance, an individual will be

b
better prepared to calculate financial risks
a
able to spend available assets.
f
faced with long-term challenges.
m
more likely to avoid high opportunity costs.
14

What term is used to describe an individual's money and personal property?

A
budget
B
income
C
assets
D
finances
15

Yuri invests $2,000 in an account with compound interest at 6%. Maria invests $3,500 in an account with compound interest at 4%. Using the rule of 72, how many years with it take Yuri and Maria to double their money?

Question illustration
A
Yuri’s money will double in approximately 18 years, and Maria’s money will double in approximately 12 years.
B
Yuri’s money will double in approximately 12 years, and Maria’s money will double in approximately 18 years.
C
Yuri’s money will double in approximately 20 years, and Maria’s money will double in approximately 25 years.
D
Yuri’s money will double in approximately 25 years, and Maria’s money will double in approximately 20 years.

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