BANKING TOPIC TEST

BANKING TOPIC TEST A principal of $5,350 is placed in an account that earns 3.5% interest. If the interest is compounded annually, how much money will be in the account at the end of 4 years? a. $5,760.06 b. $5,537.25 c. $6,099.00 d. $6,139.25 - Ans D Approximately how much principal would need to be placed into an account earning 3.575% interest compounded quarterly so that it has an accumulated value of $68,000 at the end of 30 years? a. $23,706 b. $23,377 c. $52,069 d. $58,944 - Ans B Consider the following incomplete deposit ticket: What was Art's total deposit? a. $1,701.23 b. $1,545.83 c. $1,856.63 d. $1516.35 - Ans B Consider the following incomplete deposit ticket: What was the value of the third check Tony deposited? a. $617.60 b. $105.20 c. $31.28 d. $36.76 - Ans B Faye's bank charges her a $2.25 service fee every time she uses an out-of-network ATM. If Faye uses an out-of-network ATM twice a week, how much money does she pay in service fees every year? a. $240.25 b. $225.00 c. $200.75 d. $234.00 - Ans D Having a savings account can contribute to a person's overall financial well-being. Which one of the following is NOT a benefit of maintaining a savings account? a. A savings account provides security in tough financial times b. With a savings account, you can invest when the opportunity presents itself c. Having a savings account gives individuals the ability to borrow money from members in the community d. A savings account allows an individual to fulfill life long dreams - Ans C In the formula I=P·r·t, what does P stand for? a. Percent: the interest rate expressed as a percentage b. Principal: the amount of money you initially invested c. Period: how often the interest is calculated d. Payout: how much money you end up with - Ans B In the formula I=P·r·t, what does r stand for? a. Rate: the percent that interest is paid annually as a decimal b. Ratio: the size of the interest interval compared to time c. Return: how much money you end up earning d. Reserves: how much money you have in the investment - Ans A Lonnie is considering doing some long term investing with money that she inherited. She would like to have $50,000 at the end of 30 years. Approximately how much money would Lonnie need to put into an account earning 6% interest compounded annually in order to meet her goal? a. $8,706 b. $9,000 c. $27,778 d. $40,690 - Ans A Maggie noticed that her financial record is missing information. She recalls that on October 15th, she purchased gasoline in the amount of $32.51 and on October 16th, she and her friends went out for dinner, where she spent $25.62. Given this information, and the image below, determine her balance as of October 26th. . $112.16 b. $62.03 c. $27.62 d. $2.00 - Ans A Manny has just filled out his deposit ticket for his savings account. He hands it to the teller and the teller hands it back to Manny. The teller explains to Manny that the deposit ticket cannot be accepted in its current form. What must Manny do to the deposit ticket in order for the teller to process the deposit ticket? a. Manny forgot to sign the deposit ticket for less cash back b. The subtotal is calculated incorrectly c. The total is calculated incorrectly d. Manny forgot to date the deposit ticket - Ans A Mary and Lewis each open a savings account at the same time. Mary invests $3,700 in an account yielding 3.2% simple interest, and Lewis invests $3,000 in an account yielding 5.9% simple interest. After fifteen years, who has the greater total amount of money, and how much greater is it? a. Lewis has $879 more than Mary. b. Lewis has $179 more than Mary. c. Mary has $776 more than Lewis. d. Mary has $345 more than Lewis. - Ans B Orlando invested $16,000 in an eight-year CD bearing 6.5% simple annual interest, but needed to withdraw $3,500 after five years. If the CD's penalty for early withdrawal was one year's worth of interest on the amount withdrawn, when the CD reached maturity, how much less money did Orlando earn total than if he had not made his early withdrawal? a. $227.50 b. $682.50 c. $910.00 d. $455.00 - Ans C Rate the following bank accounts from most to least liquid: CD, savings account, checking account, money market account. a. CD, savings account, checking account, money market account b. Savings account, checking account, CD, money market account c. CD, money market account, savings account, checking account d. Checking account, savings account, money market account, CD - D Richard's checkbook register as of 02/19:Enter the following transactions into Richard's checkbook register and state his ending balance: - Ans B Roberta's monthly bank statement says that she has a balance of 386.29, but Roberta's check register says that her balance is 370.77. Which of the following are still outstanding? I. A $78.17 check to the electric company II. A $16.15 deposit from Roberta's roommate III. A $22.67 check to the grocery store IV. A $62.65 deposit from Roberta's tax return a. I and II b. II and III c. II and IV d. I and IV - Ans D Roger wants to make a deposit into his savings account. He is depositing 2 checks, one for $125.62 and the other for $532.50. He would like to receive $40.00 in cash after the deposit. Calculate the amount that he will be depositing into his savings account. a. $658.12 b. $618.12 c. $743.74 d. $698.12 - Ans B Sue's bank account has a balance of $899.83 before she starts spending money. She makes the following transactions: Transaction Cost ($) Rent 353.76 Video game 32.79 Bike maintenance 60.26 Jacket 55.62 Rug 80.40 Night out 35.77 Sue is considering splitting the cost of a new TV with her roommate. Her share would be $305.22. Can Sue afford this? a. Yes, she can make the purchase and have money left over. b. Yes, but doing so will clear out her account. c. No, making that purchase will overdraw her account. d. No, she is overdrawn already. - Ans C The same amount of principal is invested in different accounts earning the same interest rate. Which of the following accounts would have the greatest accumulated value at the end of one year? a. An account earning no interest b. An account earning simple interest c. An account earning interest compounded annually d. An account earning interest compounded daily - Ans D Trevor has an investment worth $6,774.50. He made his only deposit in it 22 years ago. Given that the investment yields 2.7% simple interest annually, how big was the initial deposit? a. $2,524.50 b. $4,024.03 c. $4,250.00 d. $11,404.88 - Ans C When must you sign a deposit slip? a. You must always sign a deposit slip. b. You only need to sign a deposit slip when receiving cash. c. You only need to sign a deposit slip when using an ATM, rather than depositing at the bank. d. You never need to sign a deposit slip. Your account information is enough. - Ans B Which of the following forms of I.D. is not an acceptable form of I.D. for opening a savings account? a. Library card b. Driver's license c. Passport d. Military I.D. card - Ans A Which of the following must be present for a check to be legitimate? I. Your signature II. A memo or note III. The payee a. I and II b. III only c. I and III d. I, II, and III - Ans C Which of these can be considered "online banking?" I. A brick-and-mortar bank that allows its customers to transfer money online. II. A bank that has only a few branches but has customers depositing money online. III. A bank that does not exist as a real building, but only has an internet presence. a. I and II b. II and III c. III only d. I, II, and III - Ans D Why is simple interest useful for planning parts of your financial future? a. Simple interest can endure unforeseen economic changes by fluctuating. b. Simple interest generates more money than any other source of income. c. Simple interest grows more quickly if you invest in it longer. d. Simple interest is very regular and can be calculated in advance. - Ans D