Banking Topic Test QUESTIONS WITH COMPLETE SOLUTIONS

Banking Topic Test QUESTIONS WITH COMPLETE SOLUTIONS 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 - ANSWER A 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 - ANSWER 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 - ANSWER D 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 - ANSWER D Richard's checkbook register as of 02/19:Enter the following transactions into Richard's checkbook register and state his ending balance: - ANSWER B 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. - ANSWER B 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 - ANSWER D 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 - ANSWER C 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?