EverFi - Module 1 - Savings Exam Questions and Answers Fully Solved
interest - Answers paying extra for the convenience of borrowing money
2% interest rate - Answers $1000 in bank for 1 year = $20 earned = $1020
principal - Answers the deposit of money earning the interest
compound interest - Answers how often your interest is calculated and added back into your account
Rule of 72 - Answers tells you how long it will approx. take for you money in the bank to double at a
given interest rate
steps of Rule 72 - Answers 1. Know your interest rate.
2. Divide 72 by interest rate.
3. ex. 72/4= 18. It will take 18 years for money to double with a 4% interest rate.
Savings Account - Answers most basic form of savings vehicle; gives less access to money than a
checking account. Interest is paid and compounds. It is important to look at the minimum balance for
this savings vehicle as it could have a high min. balance or service fees. It is also helpful to note whether
it has websites or phone apps to stay up to date with your account.
Money Market Account - Answers This savings vehicle is part checking account and part savings. You can
write checks with it. It has higher interest rates and it requires a high minimum balance.
Certificates of Deposit (CD) - Answers An insured deposit held for a specific period of time, such as 3
months, a year, etc. During this term, the bank pays interest on the deposit. Term and rate changes.
Usually, longer bank keeps the money, the more interested earned- more than a savings account would
earn. You would be penalized financially if you withdrawal the money earlier than the term agrees.
budget - Answers a plan for your money- where, when, how much needs to go. It is good for a budget to
start by budgeting needs or fixed expenses (then variable, then periodic...)
income - Answers money received, usually on a regular basis
Daily Compounding - Answers Anthony is deciding between different savings accounts at his bank. He
has four options, based on how frequently interest compounds. Which should he choose if he wants the
best rate of return on his interest?
stop you from spending too much money - Answers The purpose of a budget is to
Selecting an account with a high interest rate and leaving his money in the account for long period of
time - Answers John just opened a savings account and wants to maximize the amount of interest he
earns. Which of the following actions would enable him to earn MORE interest?
interest - Answers paying extra for the convenience of borrowing money
2% interest rate - Answers $1000 in bank for 1 year = $20 earned = $1020
principal - Answers the deposit of money earning the interest
compound interest - Answers how often your interest is calculated and added back into your account
Rule of 72 - Answers tells you how long it will approx. take for you money in the bank to double at a
given interest rate
steps of Rule 72 - Answers 1. Know your interest rate.
2. Divide 72 by interest rate.
3. ex. 72/4= 18. It will take 18 years for money to double with a 4% interest rate.
Savings Account - Answers most basic form of savings vehicle; gives less access to money than a
checking account. Interest is paid and compounds. It is important to look at the minimum balance for
this savings vehicle as it could have a high min. balance or service fees. It is also helpful to note whether
it has websites or phone apps to stay up to date with your account.
Money Market Account - Answers This savings vehicle is part checking account and part savings. You can
write checks with it. It has higher interest rates and it requires a high minimum balance.
Certificates of Deposit (CD) - Answers An insured deposit held for a specific period of time, such as 3
months, a year, etc. During this term, the bank pays interest on the deposit. Term and rate changes.
Usually, longer bank keeps the money, the more interested earned- more than a savings account would
earn. You would be penalized financially if you withdrawal the money earlier than the term agrees.
budget - Answers a plan for your money- where, when, how much needs to go. It is good for a budget to
start by budgeting needs or fixed expenses (then variable, then periodic...)
income - Answers money received, usually on a regular basis
Daily Compounding - Answers Anthony is deciding between different savings accounts at his bank. He
has four options, based on how frequently interest compounds. Which should he choose if he wants the
best rate of return on his interest?
stop you from spending too much money - Answers The purpose of a budget is to
Selecting an account with a high interest rate and leaving his money in the account for long period of
time - Answers John just opened a savings account and wants to maximize the amount of interest he
earns. Which of the following actions would enable him to earn MORE interest?
