quiz 1 study

Question 1

deposit

Answer 1

money put into a bank account

Question 2

withdrawal

Answer 2

money taken out of a bank account

Question 3

savings account

Answer 3

a special bank account for storing money for future use

Question 4

checking account

Answer 4

a monetary account that allows the holder to withdraw checks against money that has been deposited into it

Question 5

simple interest

Answer 5

interest paid only on the principal in a bank account

Question 6

compount interest

Answer 6

interest earned not only on the principal in a bank account, but also on the interest earned on the account

Question 7

check

Answer 7

directs a bank to deduct money from your checking account to make a payment

Question 8

bank statement

Answer 8

lists all your checks that the bank has cleared; including automatic transfers, ATM transactions, and deposits that the bank has recorded since your last statement

Question 9

account statement

Answer 9

a bank statement that shows all deposits, withdrawals, and interest credited to an account

Question 10

balance

Answer 10

the amount of money you have in an account

Question 11

principal

Answer 11

the amount put into an account on which interest is based

Question 12

Automatic Teller Machine (ATM)

Answer 12

a bank machine that allows you to withdraw money electronically using a card

Question 13

Personal Identification Number (PIN)

Answer 13

a personal number or bankcard that gives you access to your bank account electronically

Question 14

check register

Answer 14

a record you keep of your checking account deposits, withdrawals, and transfers

Question 15

online banking

Answer 15

doing bank transactions, such as loan payments and fund transfers, electronically over the internet

Question 16

interest

Answer 16

the amount of money paid for the use of a lender’s money

Question 17

daily compounding

Answer 17

interest on an account that is computed each day and added to the account balance

Question 18

what is needed to open a bank account?

Answer 18

valid government ID
social security number
minimum deposit
parent or guardian if under 18

Question 19

how does a bank make money?

Answer 19

interest forgone
interest on lending
fees and charges

Question 20

how do you fill out a check?

Answer 20

1. write the date
2. write the recipient
3. write the amount in numerals
4. write the amount in word form
5. add a notation for what it’s for
6. sign the check