Chapter 05 – Financial Services: Savings Plans and Payment Accounts
51. (p. 164) A personal check with guaranteed payment is called a:
52. (p. 141) Neil Guest writes a check to pay for day care for his son. What type of financial
service is Neil using?
53. (p. 141) Nate Rogers deposited $5,000 in a 3-year bank CD which pays six percent interest.
What type of financial service is Nate using?
Chapter 05 – Financial Services: Savings Plans and Payment Accounts
54. (p. 141) David Wynn gets a personal loan from his credit union for $1,000. David will make
monthly payments $85.15 over the next year to repay the loan. What type of financial service
is David using?
55. (p. 141) Tim Gleason has set up a legal agreement that allows the First State Bank of
Orlando to manage funds set aside for his daughter’s college education. What type of financial
service is Tim using?
56. (p. 146) What is the rate that commercial banks charge large corporations for loans called?
Chapter 05 – Financial Services: Savings Plans and Payment Accounts
57. (p. 146) What is the rate that the Federal Reserve charges banks for loans called?
58. (p. 146) What is the rate an individual will pay for borrowing to purchase a new home
called?
59. (p. 146) What is the term used to refer to the yield on a long term bond issued by the federal
government?
Chapter 05 – Financial Services: Savings Plans and Payment Accounts
60. (p. 146) Which of the following is a deposit institution?
61. (p. 145-146) Which of the following is not a deposit institution?
62. (p. 148) Which of the following institutions is organized primarily to provide loans to
purchase homes?
Chapter 05 – Financial Services: Savings Plans and Payment Accounts
63. (p. 147) Which of the following institutions makes loans based on the value of tangibles
possessions, such as jewelry and collectibles?
64. (p. 152) Which of the following is a drawback of a money market fund from an investment
company?
65. (p. 151) Which CD attempts to attract savers with gifts or special rates?
Chapter 05 – Financial Services: Savings Plans and Payment Accounts
66. (p. 150) Which is a CD that offers a higher rate for every six months you are invested?
67. (p. 151) Which CD pays earnings based on the stock market?
68. (p. 151) Which CD starts with a higher rate, has a long time to maturity, and can be retired
by the bank after a set time period?
Chapter 05 – Financial Services: Savings Plans and Payment Accounts
69. (p. 151) Purchasing a new CD upon maturity of the current CD is commonly referred to as:
70. (p. 155) Which law requires banks and other financial institutions to disclose fees, the annual
percentage yield, and the other terms and conditions on checking and savings accounts?
71. (p. 145-148) Which type of organization does not provide home mortgages?
Chapter 05 – Financial Services: Savings Plans and Payment Accounts
72. (p. 151) What type of account would you expect to provide the poorest yield?
73. (p. 155) What type of account would be considered the most liquid?
74. (p. 147) A pawnshop with a monthly interest rate of 2.75 percent would have an annual
interest rate of ____ percent. Ignore compounding.
Chapter 05 – Financial Services: Savings Plans and Payment Accounts
75. (p. 147) A person borrows $200 from a payday loan company, and pays $10 interest for two
weeks. This would result in an annual interest rate of approximately ___ percent. Ignore
compounding.
76. (p. 157) A savings account earns 4 percent. If the saver is in a 28 percent tax bracket, the
after-tax savings rate of return would be ____ percent.
Chapter 05 – Financial Services: Savings Plans and Payment Accounts
77. (p. 157) The Federal Deposit Insurance Corporation insures deposits up to $250,000 per
person per financial institution. Suzanne has $200,000 in an individual account and $424,000
in a joint account with her husband, Ted. How much of Suzanne’s money is not covered by
FDIC insurance?
78. (p. 156) Sue deposited $1,000 in an account paying 3 percent interest. The inflation rate is 5
percent. What is the buying power of the account after one year?
Chapter 05 – Financial Services: Savings Plans and Payment Accounts
79. (p. 163) Your bank statement shows a balance of $670. Your checkbook register shows a
balance of $462. You earned interest of $2 and had a service charge of $4. There are no
outstanding deposits. What is the amount of outstanding checks?
80. (p. 145) Which of the following types of financial institutions provide Federal Deposit
Insurance (FDIC) coverage?
81. (p. 137) Which of the following represent the use of credit?
Chapter 05 – Financial Services: Savings Plans and Payment Accounts
82. (p. 139) Which of the following is a way to reduce ATM surcharges?
83. (p. 149) The face value of a Series EE U. S. Savings Bond refers to the:
84. (p. 150) Determine the rate of return (yield) on a savings account in which you deposited
$300.00 and earned $6.00 in interest after one year.
Chapter 05 – Financial Services: Savings Plans and Payment Accounts
85. (p. 141) What are the main types of financial institutions used by consumers?
86. (p. 154) Evan Nolan is a college graduate who has just landed a great job. He feels it is time
for him to start saving a portion of his earnings. What factors would you recommend he
consider when evaluating and comparing different savings plans?
Chapter 05 – Financial Services: Savings Plans and Payment Accounts
87. (p. 160) Brad Kellogg maintains a monthly balance in his checking account of approximately
$150, writes about 25 checks a month, and makes three deposits each month. How would
Brad decide which one of the following checking accounts he should use?
88. (p. 150-153) You are planning to purchase a house in five years and intend to save a fixed
amount of money each month for a down payment. How will you invest your savings and
what are important considerations in selecting an investment vehicle?
Chapter 05 – Financial Services: Savings Plans and Payment Accounts
89. (p. 156) Josh earned $120 on $1500 invested in a high yield money market account. He is
taxed at 28% of his earnings. What is the effective yield on his investment?