JA Financial Literacy: Theme Two

What distinguishes a bank from a credit union?

• Banks aim to generate profit, while credit unions use profits to benefit their members.

• Banks provide higher interest rates compared to credit unions.

• Credit unions lack online banking services, unlike banks.

• Banks offer a wider range of services than credit unions.

Sasha is looking for a bank that operates 24/7 and is accessible internationally. Which bank should she opt for?

• Local credit union

• Internet bank

• International financial institution

• Savings and loan

What makes higher-interest checking and savings accounts more advantageous?

• They provide you with more checks.

• They manage and transfer funds and offer various payment methods.

• They accelerate your rate of return.

• They require more time to generate additional income.

Identify which option is not a payment method using a checking account.

• EFT

• Debit card

• Credit card

• Personal check

What is the term for regularly setting aside a specific amount of money for emergencies or future savings?

• Pet insurance fund

• Paying yourself first

• A slush fund

• 401k retirement fund

What will be the balance in a savings account after one year if $500.00 is deposited at an annual interest rate of 10% compounded yearly?

• $550.00

• $552.36

• $505.00

• $600.00

What is the term for the most valuable alternative forgone when a decision is made due to limited resources?

• Opportunity cost

• Scarcity cost

• Discretionary cost

• Second best

The Rule of 72 is used to calculate:

• The yearly interest rate

• The number of months needed to reach a savings goal

• The duration for an investment to double in value

• The starting amount required for investment

How is an individual's net worth calculated?

• It represents an estimate of their total lifetime earnings.

• It is their net income times their annual interest rate.

• It is the sum of their total assets and bank account balances, minus liabilities.

• It is their financial net worth divided by their liabilities.

What is the function of a transaction register?

• To log written checks

• To maintain a continuous balance of your bank account

• To monitor all your deposits, payments, and purchases

• All of the above