Week 5 Quiz - Saving (15pts) 1. If the interest rate on a savings account is 0.01%, approximately how much money do you need to
keep in this account for 1 year to earn enough interest to cover a single .$9.99 Below-Minimum-Balance Fee? a.$100,000 b.$100 c.$10,000 d.$1,000 2. The three main types of banks (Traditional, Credit Union, Online or Online-Only) have many tradeoffs with respect to technology, convenience, personal experience, fees and savings rates. For this question, put aside all of the trade-offs and look only at savings rate offered on savings accounts. Rank the following from highest to lowest on the interest rates they offer to consumers on savings accounts. a.Traditional Bank, Credit Union, Online Bank b.Credit Union, Online Bank, Traditional Bank c.Credit Union, Traditional Bank, Online Bank d.Online Bank, Credit Union, Traditional Bank 3. For most people, the most effective way to save is: a.Transfer money from a checking account into a saving account b.Use a budget to determine how much you can save, then transfer that amount into a savings account c.Use a budget to determine how much you can save, then automate the savings by direct depositing that amount from each paycheck d.Deposit extra money into a saving account 4. True or False, you can never save too much? a.True b.False 5. Assume you have just started a new job, have a car loan, and have a student loan. You have just received a cash gift of $1,000 from a relative, which of the following is the best use of this money? a.Deposit into an unfunded emergency fund b.Deposit into a 529 savings account for college c.Invest for your retirement in an IRA d.Deposit into a CD earning 2% interest
