Unit 3 Test - Savings - Matthew Goldstein | Library

Instructions

Here are the links for the calculators:
Simple interest: https://www.calculatorsoup.com/calculators/financial/simple-interest-plus-principal-calculator.php
Compound interest: https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator
Or Compound interest: https://www.nerdwallet.com/banking/calculator/compound-interest-calculator
Desmos calculator: https://www.desmos.com/scientific

1

When a bank says their savings account earns 1% interest, that typically means you will earn 1% interest over what period of time?

1

Stanley deposits $1,000 into a savings account that pays 1% interest per year. At the end of the first year, he's earned $10 in interest and there is $1,010 in the account. If the account has simple interest, the 1% interest for year two would be based off . If the account has compounding interest, the 1% interest for year two would be based off ____.(NOTE: The first choice goes in the first blank, the second choice goes in the second blank).

1

If you deposit $200 into a CD (Certificate of Deposit) with an interest rate of 1% for 3 years, how much simple interest will you earn after THREE years?

1

If you deposit $2000 into a savings account with interest compounded monthly at a rate of 2.5% for 3 years, how much interest will be in your account at the end of 3 years?

1

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?

1

You are comparing two savings accounts based on the interest you would earn and the fees they charge. Assuming you have a savings account with an average balance of $500, which combination of interest rates and fees are a better deal? (Hint: Using a one year period, determine the balance that you would have at Bank A and Bank B).

1

Which of these statements about savings is INCORRECT?

1

Hector is 17 years old and just started his first job. He wants to open a savings account. Which of these will he need to bring to the local bank branch in order to start an account?

1

Comparing banks, what makes Bank B a better option than Bank A?

1

Comparing banks, what makes Bank B a better option than Bank C?

1

Kevin opens a new bank account at Northstone Savings. You see FDIC stickers around the bank, and the teller specifically mentions that Northstone Savings is "FDIC insured". A few months later, you hear on the radio that Northstone Savings is struggling to stay in business. Your savings balance is $500. What would happen to that money if Northstone Savings failed?

1

Which list includes the most important factors to consider when opening a savings account?

1

Which of the following is an effective strategy for personal saving?

1

What would be a good time to spend money from your Emergency Fund?

1

Which of the following statements about banks is FALSE?

1

You are developing a savings plan and using short-, medium- and long-term goals to motivate you. Which of the following might you pick as the most long-term goal?

1

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?

1

Assume Sid the Saver is earning 0.5% interest on his savings account while inflation is running 2% per year. Which statement below is TRUE?

1

Which of the following statements is TRUE?

1

All of the following are good strategies to develop savings habits EXCEPT...

1

Which of the following individuals is the wealthiest?

1

If you used the 50-20-30 rule of budgeting, how much of your income should you be saving?

1

Which of the following is an example of delayed gratification as it pertains to saving?

1

Misty just secured her first job after college, and she's heard that it's important to start investing for her retirement. She can afford to put 5% of her monthly salary toward retirement. What type of account should she choose for this goal?

1

Kevin is working full-time and wants to make sure he's saving strategically for four specific goals: an emergency fund ($5000), a flight home to see his parents for the holidays ($450), a downpayment on a new car ($3000), and his retirement (2% of his monthly take-home pay). What's his best strategy?