Introduction to Business

Section 1: The Basics of Saving Accounts

Self-Checks

1
The money you save is called your __________ .
A)assets
B)investments
C)savings
D)wealth
2
The cost __________ of a decision is the same as the benefit of the choice that is given up when one decision is made instead of another.
A)absolute
B)beneficial
C)net
D)opportunity
3
The percentage increase in the value of your savings from earned interest is the __________ .
A)interest rate
B)rate of return
C)return factor
D)savings ratio
4
Experts recommend that people set aside at least __________ of income for emergencies.
A)three months
B)six months
C)twelve months
D)eighteen months
5
Some personal finance experts suggest people should try to save __________ .
A)10 percent of take-home pay
B)12 percent of gross pay
C)$100 per month
D)a nickel of every dollar you earn
6
Interest earned only on the money deposited into a savings account is called __________ .
A)easy interest
B)principal interest
C)simple interest
D)straight interest
7
Interest earned on the principal and any interest earned on the principal is __________ .
A)combination interest
B)complex interest
C)composite interest
D)compound interest
8
Using the Rule of 72, you could expect to double your investment in __________ if the interest rate is eight percent.
A)9 months
B)9 years
C)48 months
D)48 years
9
You save $100 per month in an account paying 5 percent interest. In 10 years you have approximately $15,500 in the account. The interest earned is about __________ .
A)$600
B)$1,550
C)$3,500
D)$5,500
10
If you put $500 in a savings account today and the account pays 10 percent interest annually, one year from now your account would contain __________ .
A)about $500
B)close to $550
C)more than $600
D)more than $1,000
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