Quiz about Financial Literacy Chapter 4

Question 1

Banks are a place to keep money safe.

Accepted Answer

True

Answer

False

Question 2

Putting money in a bank is called a deposit.

Accepted Answer

True

Answer

False

Question 3

Interest is a fee charged by a borrower to the lender for the use of money.

Accepted Answer

False

Answer

True

Question 4

The current amount of money in you bank account is your balance.

Accepted Answer

True

Answer

False

Question 5

Simple interest is paid on principal and accumulated interest.

Accepted Answer

False

Answer

True

Question 6

Compound interest is paid on principal and accumulated interest.

Accepted Answer

True

Answer

False

Question 7

Debit cards are used to make deposits more conveniently than with deposit slips.

Accepted Answer

False

Answer

True

Question 8

A bank statement is a report that regularly summarizes account activity.

Accepted Answer

True

Answer

False

Question 9

Federal law prohibits charging fees related to bank accounts.

Accepted Answer

False

Answer

True

Question 10

Routing numbers show the number of checks written on your accounts.

Accepted Answer

False

Answer

True

Question 11

Banks offer which types of accounts?

Accepted Answer

Checking and savings

Answer

Debit and overdraft

Answer

Checking and debit

Answer

Clearing and balancing

Question 12

The FDIC insures a customer's checking account in a bank for up to _____________.

Accepted Answer

$250,000

Answer

$200,000

Answer

$150,000

Answer

$100,000

Question 13

A document that authorizes your bank to transfer your money to another person or entity is a _________________.

Accepted Answer

check

Answer

deposit slip

Answer

depository note

Answer

routing number slip

Question 14

What is another name for a fee charged by a lender to a borrower?

Accepted Answer

Interest

Answer

Debit card

Answer

Overdraft

Answer

Service charge

Question 15

The current amount of money in your savings or checking account is called your ___________.

Accepted Answer

balance

Answer

debit

Answer

deposit

Answer

overdraft

Question 16

Electronic transfers do NOT involve _____________.

Accepted Answer

checks

Answer

fees

Answer

record keeping

Answer

bank accounts

Question 17

If you spend more money than you have in your checking account, your account is _________________.

Accepted Answer

overdrawn

Answer

reconciled

Answer

cleaared

Answer

automatically closed

Question 18

Simple interest is calculate on the ........

Accepted Answer

principal only.

Answer

principal and accumulated interest.

Answer

accumulated interest.

Answer

reconciled balance.

Question 19

Compound interest is calculated on the __________________.

Accepted Answer

principal and accumulated interest

Answer

principal only

Answer

accumulated interest

Answer

reconciled balance

Question 20

When you reconcile your bank account, you verify that ___________________.

Accepted Answer

your balance agrees with the bank

Answer

your account is not overdrawn

Answer

interest has been calculated accurately

Answer

your routing number is correct

Question 21

A ______________________ is a business that allows a customer to deposit money into an account and withdraw it when needed.

Accepted Answer

bank

Answer

balance

Answer

principal

Answer

interest

Question 22

The current amount of money in your account is your ________________________.

Accepted Answer

balance

Answer

bank

Answer

interest

Answer

compound interest

Question 23

The fee charged by a lender to a borrower for the use of money is called ____________________.

Accepted Answer

interest

Answer

principal

Answer

balance

Answer

bank

Question 24

The original sum of money upon which interest is paid is called the ____________________.

Accepted Answer

principal

Answer

balance

Answer

compound interest

Answer

bank statement

Question 25

Interest that is calculated on the principal and accumulated interest is called ____________________.

Accepted Answer

compound interest

Answer

principal

Answer

reconcile

Answer

overdrawn

Question 26

Which interest calculation method would allow you to earn more interest over time: simple or compound?

Accepted Answer

Compound interest will earn more over multiple periods.

Answer

Simple interest paid on accumulated interest.

Answer

Principal interest will earn more over multiple periods.

Answer

Simple interest paid on the principal balance.

Question 27

Why is it important to know the correct balance in your checking account?

Accepted Answer

It will help you avoid being overdrawn.

Answer

To calculate how much interest is expected.

Answer

It is safer, and the money earns interest.

Answer

To trace electronic transfers.

Question 28

Manny deposits checks for $675.44, $100, and $45.89 in his checking account. He also deposits $23.44 in cash and coin. How much is his net deposit?

Accepted Answer

$844.77

Answer

$797.89

Answer

$821.33

Answer

$775.44

Question 29

Cynthia deposits a $436.78 check into her savings account but wants $60.00 returned in cash. How much is her net deposit?

Accepted Answer

$376.78

Answer

$436.78

Answer

$496.78

Question 30

Zoe currently has a checking account balance of $1,209.65 . She writes a $725 check to pay her rent and a $76.45 for her phone bill. What is her new balance?

Accepted Answer

$408.20

Answer

$2,011.10

Answer

$484.65

Answer

$561.10

Question 31

A(n) ____________ is a fee a bank charges you for having an account.

Accepted Answer

service charge

Answer

interest

Answer

overdraft

Answer

reconcile

Question 32

Rhonda is considering loaning $2,000 to her brother for one year. He would repay the loan plus 3% simple interest. How much interest will Rhonda receive?

Accepted Answer

$60

Answer

$2,123.20

Answer

$600

Answer

$21.16

Question 33

Simple interest....

Accepted Answer

is paid only on the original principal.

Answer

cannot be paid by credit unions.

Answer

cannot be expressed as a percentage.

Answer

is another name for compound interest.

Question 34

A place to deposit money for safe keeping and to earn interest.

Accepted Answer

Bank

Answer

Statement

Answer

Reconcile

Answer

Principal

Question 35

The act of putting money in a bank.

Accepted Answer

Deposit

Answer

Electronic funds transfer

Answer

Balance

Answer

Interest

Question 36

Account status when you have written checks for more than you have in your checking account.

Accepted Answer

Overdrawn

Answer

Balance

Answer

Reconcile

Answer

Statement

Question 37

Summarizes your bank account activity.

Accepted Answer

Statement

Answer

Balance

Answer

Electronic funds transfer

Answer

Deposit

Question 38

Current amount of money in your banking account.

Accepted Answer

Balance

Answer

Bank

Answer

Deposit

Answer

Check

Question 39

Authorizes the transfer of money to another person or entity.

Accepted Answer

Check

Answer

Interest

Answer

Overdrawn

Answer

Statement

Question 40

A bank account that pays interest.

Accepted Answer

Savings account

Answer

Checking account

Answer

Electronic Funds Transfer

Answer

Deposit

Question 41

Verify that you and your bank agree on your balance.

Accepted Answer

Reconcile

Answer

Debit card

Answer

Statement

Answer

Overdrawn

Question 42

Allows transfer of money without using cash or checks.

Accepted Answer

Electronic funds transfer

Answer

Reconcile

Answer

Savings account

Answer

Statement

Question 43

Fee charged by a lender to a borrower for the use of money.

Accepted Answer

Interest

Answer

Balance

Answer

Overdraft

Answer

Principal

Question 44

Identify two reasons why you would deposit money into a bank checking account instead of keeping it at home.

Accepted Answer

It is safer.

Accepted Answer

It provides a more convenient way to make payments.

Answer

The money earns interest

Answer

The compound interest will earn more over multiple periods.

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