Flashcard Set Preview
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| 1 |
What are time deposits?
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Deposits that are held for or mature at a specified time.
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| 2 |
What are some examples of time deposits?
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Savings accounts, checkable deposits. Money market deposit accounts and (CD) Certificate of...
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| 3 |
Two examples of Savings Accounts
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Passbook savings account and Statemnent Savings accounts. Savings accounts are among the safest...
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| 4 |
What is a certificate of deposit?
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A certificate offered by a bank that guarantees payment of a specified interest rate until...
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| 5 |
What is interest?
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The price paid for the use of money. Interest is expressed by percentages.
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| 6 |
Calculating Interest
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Principal multiplied by rate and time equals Interest. Months are expressed in decimals 6 months=...
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| 7 |
What is compound interest?
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Adding interest to principal and playing interest on the new total.
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| 8 |
Simple Interest 5%
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Compound Interest 5%
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| 9 |
What us annual percentage rate?
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The normal rate in which interest is calculated per year
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| 10 |
What is annual percentage yield?
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Represents the effect of compounding
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| 11 |
List three types of time deposits. Which of these are exempt form the reserve requirements.
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Money market deposit accounts
Savings accounts
Savings accounts
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| 12 |
What do the terms in the formula P x R x T = I stand for?
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P is principal, R is rate, T is time, and I is interest.
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| 13 |
What is a transaction account? Why are transaction accounts considered deposits?
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a. A transaction account allows transactions to occur at anytime and in any number.
b. Its...
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| 14 |
How does the frequency at which interest is compounded change the effect of the compounded...
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It changes the effect because it would make the interest rate rise more frequently than if...
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| 15 |
3. Why is APY more useful measure for comparing interest rates that APR
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a. APY is more useful because the rate percentage is dependant on how much you deposit whereas...
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| 16 |
What does money include?
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Money includes checks, ledger transfers, and even credits
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| 17 |
How do reserve requirements impact the flow of money?
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If reserve requirements are high than the money supply contracts because banks must keep more...
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| 18 |
What are the 2 ways the Fed can influence the money supply and the flow of deposits.
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Fed can put more money into the economy by buying securities or by creating new money. This...
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| 19 |
What is the discount rate?
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The rate the feds charges the banks for loans
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| 20 |
Why are governing documents necessary?
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Documents are necessary because it helps customers so that questions about their accounts have...
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| 21 |
How do governing documents and account rules different?
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The difference between documents and rules are that documents tell about the account where...
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| 22 |
How does the federal reserve influence the flow of deposits
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a. The Federal Reserve sets a reserve requirement. If the rate is high than there is more money...
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| 23 |
What is the greatest factor in the flow of deposits? Why do economist track and analyze so...
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a. The activity of the economy at large. Economist track and analyze so much
data so that...
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