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15 Cards in this Set
- Front
- Back
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A demand deposit account designed for the accumulation of money in a safe place |
Savings Account
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A sum of money set aside on which interest is paid.
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Principal
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Interest computed on principal once during a certain time period.
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Simple Interest |
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Interest earned on both principal and previously earned interest. |
Compound Interest |
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A fixed amount set aside on a regular basis over time. |
Annuity |
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A principle used for computing how long it will take to double money invested at a given interest rate. |
Rule of 72 |
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A type of savings account that earns the market rate of interest on the money deposited. |
Money Market Account |
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A time deposit that pays a fixed rate of interest for a specified length of time. |
Certificate of Deposit (CD) |
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A discountbond issued by the federalgovernment that pays aguaranteed minimum rate of interest. |
U.S. Savings Bond |
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A bond’s futurevalue as stated on its face |
Maturity Value |
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What is the formula for calculating simple interest? |
Formula for Simple Interest: Interest = Principal x Rate x Time |
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How is simple interest different than compound interest? |
Simple interest is calculated on the principal amount of a loan while Compound interest is calculated on both the principal and previously earned interest. |
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What does the future value of money mean? |
The future value of money means how much money will be worth in the future after interest has compounded. |
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Why are U.S. savings bonds considered to be a safe form of saving? |
U.S. savings bonds are a safe form of saving because they are backed by the United States government's full faith and credit. |
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What is the Rule of 72 that is related to saving? |
The Rule of 72 provides a quick formula for computinghow long it will take to double money invested at a given interestrate. To use the rule, divide the annual interest rate into72. |
