Unit 4 Review

What is the purpose of a checking account?

• 
  to have an account to link to a savings account for overdraft protection

• 
  provides a secure place to hold money that will not be accessed for a long period of time

• 
  provides a secure place to put money that can be used to regularly make payments

• 
  to have a place to save extra money and have it earn interest

Cheyanne puts $540 in a savings account that ears 1.25% simple interest annually. She leaves the money for 5 years. Match the parts of the simple interest formula with the corresponding value.

• 5

• total in account

• $33.75

• variable P

• $573.75

• variable r

• $540

• interest earned

• .0125

• variable t

What are the similarities and differences between a bank and a credit union?

Sort the statements based on if they describe a bank, credit union, or both.

Groups:

(a) Bank

,

(b) Credit Union

,

(c) Both

• money is insured

• privately owned

• member owned

• there are requirements to be a member

• profits are used to have lower fees or higher savings interest rates

• insured by the FDIC

You need to write a check for $72.27 to Larry's Cable Company to pay for your monthly cable.

Match the labeled parts of the check with what should be written on the check.

a

b

c

d

e

cable bill

seventy-two and 27/100

your signature

72.27

Larry's Cable Company

Below are images of parts of three different checking account holder's monthly statements. They all opted in to overdraft protection. The balance column has not been fully completed.

Analyze the accounts to determine the missing balances. Which account will have an additional line showing an overdraft fee was applied?

What does the FDIC do for account holders?

• 
  provides the bank the opportunity to purchase its own insurance

• provides insurance that protects account amounts up to $250,000

• 
  enforces all government regulations on accounts

• 
  provides the service of direct deposit

Which statements describe a savings account? Check all that apply.

• has a fixed interest rate that stays the same

• 
  must remove cash or transfer funds to a checking account to use the stored money

• 
  can use checks or a debit card to access money

• 
  typically has a minimum monthly balance

Which statements describe a money market account? Check all that apply.

• 
  must remove cash or transfer funds to a checking account to use the stored money

• 
  typically has a minimum monthly balance

• 
  often has higher interest rates

• 
  can use checks or a debit card to access money

Which account would earn the most interest?

• savings account with simple interest

• savings account with compound interest

• checking account