Other Bank Accounts Answers

Gareth has $2,000 to invest. Putting the money in a savings account at his local bank will earn him 2.2% annual interest and gives him the ability to make ATM withdrawals from that bank’s ATMs. Putting the money in an online savings account will earn him 4.85% annual interest, but he will be charged $3 every time he makes an ATM withdrawal. Assuming that Gareth’s ATM withdrawals do not affect the amount of interest he earns, roughly how many ATM withdrawals must Gareth make every year for the local savings account to be a better deal than the online savings account?a.8b.14c.18d.25

Which of these can be considered “online banking?”I. A brick-and-mortar bank that allows its customers to transfer money online.II. A bank that has only a few branches but has customers depositing money online.III. A bank that does not exist as a real building, but only has an internet presence.a.I and IIb.II and IIIc.III onlyd.I, II, and III

How is email a useful component of online banking? I. Email alerts can be used to warn you before you overdraw your account. II. You can have your bank statements emailed to you, getting them to you faster. III. Only emailed bank statements can be used to support electronically-filed tax returns. a. I only b. II only c. I and II only d. I, II, and III Please select the best answer from the choices provided

Greg invests $2,680 in a CD paying 7.0% interest, and $3,060 in an online savings account paying 4.5% interest. How much more interest will the CD have earned than the savings account after 1 year? a. $25.90 b. $49.90 c. $380.00 d. $499.00 Please select the best answer from the choices provided

A bank offers a four year cd with an interest rate of 2.75%. The penalty for early withdrawal from the CD is nine months of simple interest, calculated on the amount withdrawn. Rachel invests $6,200. If she withdraws $2250 after one year, how much will the penalty be? Round answer to the nearest dollar. a. $46 b. $56 c. $128 d. $557 Please select the best answer from the choices provided

You have $3,750 to deposit. If you deposit the money in a savings account at your local bank, you will earn 1.75% annual interest and will be able to make ATM withdrawals at your bank’s ATMs. If you deposit the money in an online savings account, you will earn 3.25% interest, but you will be charged $4 every time you make an ATM withdrawal. Assuming that your ATM withdrawals do not reduce the amount of interest you earn, roughly how often must you make an ATM withdrawal for the local savings account to be a better deal than the online savings account? a. Thirteen times per year b. Once per month c. Every three weeks d. Every two months Please select the best answer from the choices provided

Rate the following bank accounts from most to least liquid: CD, savings account, checking account, money market account.a.CD, savings account, checking account, money market accountb.Savings account, checking account, CD, money market accountc.CD, money market account, savings account, checking accountd.Checking account, savings account, money market account, CD

Why do certificates of deposit tend to offer better interest rates than money market accounts?a.Certificates of deposit involve a longer time commitment than money market accounts, so they carry a greater return.b.Certificates of deposit are only available to the bank’s most proven and valuable customers, so the bank can afford to give a greater interest rate on them.c.They do not offer a better interest rate. Money market accounts tend to have the best interest rates of any bank deposit.d.Money market accounts invest your money but sometimes lose some of it, so the lower interest rate pays for the difference.

Which of the following are advantages of certificates of deposit (CDs) over savings accounts?I. CDs are more readily accessible than savings accounts.II. CDs offer greater interest rates than savings accounts.III. CDs have greater FDIC backing than savings accounts.a.I and IIb.II onlyc.I and IIId.none of these

Orlando invested $16,000 in an eight-year CD bearing 6.5% simple annual interest, but needed to withdraw $3,500 after five years. If the CD’s penalty for early withdrawal was one year’s worth of interest on the amount withdrawn, when the CD reached maturity, how much less money did Orlando earn total than if he had not made his early withdrawal? a. $227.50 b. $682.50 c. $910.00 d. $455.00 Please select the best answer from the choices provided