Chapter 3: Banking
Interest - ANS-The money paid to an individual or institution for the privilege of using their
money.
Transaction - ANS-Something that has to be recorded, such as a deposit or withdrawal.
INTEREST FORMULA
I = prt - ANS-I = Interest
p = principal
r = rate
t = time
Compound Amount - ANS-The total money in the savings account at the end of the last interest
period.
Compound Interest - ANS-The total interest earned; difference between the original principal
and compound amount.
COMPOUND INTEREST FORMULA
B = p[1+(r/n)]^nt - ANS-B = balance
p = principal or original balance
r = interest rate expressed as a decimal
n = number of times the amount is compounded annually
t = number of years
Deposit Slip - ANS-A form used to deposit paychecks and other monies to a bank or financial
institution.
Balance - ANS-The amount of money in the account.
Check Register - ANS-The book in which people keep records of checks, deposits, debit card
transactions, and ATM withdrawals.
Running Balance - ANS-A new balance calculated after each entry.
Overdrawn (Account) - ANS-When an individual writes more money than is in their account.
Bouncing a Check - ANS-Having insufficient funds in an account.
Endorsement - ANS-A signature or stamp on the back of a check transferring ownership.
Interest - ANS-The money paid to an individual or institution for the privilege of using their
money.
Transaction - ANS-Something that has to be recorded, such as a deposit or withdrawal.
INTEREST FORMULA
I = prt - ANS-I = Interest
p = principal
r = rate
t = time
Compound Amount - ANS-The total money in the savings account at the end of the last interest
period.
Compound Interest - ANS-The total interest earned; difference between the original principal
and compound amount.
COMPOUND INTEREST FORMULA
B = p[1+(r/n)]^nt - ANS-B = balance
p = principal or original balance
r = interest rate expressed as a decimal
n = number of times the amount is compounded annually
t = number of years
Deposit Slip - ANS-A form used to deposit paychecks and other monies to a bank or financial
institution.
Balance - ANS-The amount of money in the account.
Check Register - ANS-The book in which people keep records of checks, deposits, debit card
transactions, and ATM withdrawals.
Running Balance - ANS-A new balance calculated after each entry.
Overdrawn (Account) - ANS-When an individual writes more money than is in their account.
Bouncing a Check - ANS-Having insufficient funds in an account.
Endorsement - ANS-A signature or stamp on the back of a check transferring ownership.
