unit 2, college costs, job, career, saving, interest, rule of 72, annuities

Question 1

two reasons why savings tools are ideal for storing emergency savings

Answer 1

1) secure, money is guaranteed
2) liquid, money is easily accessible

Question 2

checking account

Answer 2

most liquid
day to day transactions
most do not have interest

Question 3

savings account

Answer 3

more liquid
emergency/short term savings
low interest rates

Question 4

money market deposit account

Answer 4

less liquid (min. balance/transaction reqs)
hybrid account
tiered interest rates

Question 5

certificate of deposit (CD)

Answer 5

least liquid (7 days-10 yrs)
contract, certain time and rate
interest rates vary on time and amt $ deposited
6 mths-2 yrs reccomended

Question 6

simple interest formula

Answer 6

I=PRT

Question 6

compound interest formula

Answer 6

F=P(1+r/n)^n*t

Question 7

rule of 72

Answer 7

used to find years for $ to double (72/%)
used to find interest rate needed to double $ (72/yrs)

Question 8

5 ways to pay for college

Answer 8

student loans
scholarships
savings
grants
work study

Question 9

4 types of financial aid

Answer 9

grants
scholarships
work-study jobs
student loans

Question 10

tuition

Answer 10

amount you owe to attend classes

Question 10

fees

Answer 10

technology fees, lab fees, etc

Question 11

housing

Answer 11

charge to live on campus

Question 12

meal plans

Answer 12

some offer meal credits, some charge by food item

Question 13

indirect expenses

Answer 13

educational costs not paid directly to the college ex. textbooks, transportation, furniture, etc

Question 14

FAFSA

Answer 14

free application for federal student aid

Question 15

what must you have done prior to filling out the FAFSA

Answer 15

use an IRS direct data exchange

Question 16

how often to fill out FAFSA

Answer 16

every year you plan to attend college

Question 17

due date for filling out FAFSA

Answer 17

June 30

Question 18

SAR

Answer 18

student aid report
gives basic info abt eligibility for fed. student aid

Question 19

EFC

Answer 19

estimated family contribution
determines students’ eligibility for certain types of federal student aid