CHAPTER 6 WORKSHEET



CHAPTER 6 WORKSHEET

1. Complete the following sentences.

A) Another name for self-service banking is __________________________

B) Three types of electronic funds transfer are direct deposit, ______________________ and ___________________________.

C) A transaction that can be done at any ATM whether or not it is associated

with your bank is ___________________________________________.

2. Name three transactions that can be done at an ATM associated with your bank and by on-line banking and telephone banking.

3. Name two transactions that can be done at an ATM associated with your bank, but cannot be done by on-line banking or telephone banking.

4. Assume that you get 10 self-service transactions for a monthly banking fee and you must pay 75¢ for additional self-service transactions. Suggest a realistic set of transactions that could be made in one month where there is only one 75¢ charge in addition to the monthly fee.

5. Match each banking term with an appropriate code. (DBT, SC, WD, DEP, ET)

A) electronic funds transfer __________

B) deposit __________

C) service charge __________

D) withdrawal __________

E) debit card __________

6. For a monthly fee of $7.50 you get

• 10 self-serve transactions

• 5 full-serve transactions

Additional self-serve transactions cost 60¢ each

Additional full-serve transactions cost $1.10 each

Each use of an ATM not associated with this bank costs $1.05, plus the transaction fee, if applicable.

Kyle did the following banking one month:

Deposited a cheque at a teller 4 times

Wrote 4 cheques

Paid 5 bills on-line

Used his debit card 3 times

Deposited his rolled coins 2 times

Withdrew money 3 times from an ATM not associated with his bank.

What was the total monthly charge?

7. A) Identify three savings alternatives available at banks.

B) Which alternative does not pay interest? _____________________________

C) Which alternative pays more interest? ______________________________

D) With which alternative do you have ready access to your money?

________________________________

E) Which alternative has a risk? _____________________________________

8. Which type of interest is described by this statement?

“The interest earned is re-invested, increasing the principal.”

_______________________________

9. Calculate the simple interest and the amount for each of the following.

| | |Interest |Amount |

| | |($) |($) |

|A) |$4500 at 5% per annum for 3 years | | |

|B) |$2000 at 3% per annum for 21 months | | |

10. Calculate the amount and the interest earned for each of the following.

| | |Amount |Interest |

| | |($) |($) |

|A) |$4000 at 4% per annum, compounded semi-annually for 3 years | | |

|B) |$2000 at 12% per annum, compounded quarterly for 1 year | | |

11. Which is worth more after three years? How much more?

i) $100 earning 12% per annum ii) $100 earning 15% per annum

compounded monthly simple interest

12. Use the spreadsheet shown to answer the questions.

|Principal ($): | |3500.00 |

|Interest Rate (%): | |6 |

| | | | |

|Year |Principal ($) |Interest ($) |Amount ($) |

|1 |3500.00 |210.00 |3710.00 |

|2 |3710.00 |222.60 |3932.60 |

|3 |3932.60 |235.96 |4168.56 |

|4 |4168.56 |250.11 |4418.67 |

|5 |4418.67 |265.12 |4683.79 |

|6 |4683.79 |281.03 |4964.82 |

|7 |4964.82 |297.89 |5262.71 |

|8 |5262.71 |315.76 |5578.47 |

|9 |5578.47 |334.71 |5913.18 |

|10 |5913.18 |354.79 |6267.97 |

|11 |6267.97 |376.08 |6644.04 |

|12 |6644.04 |398.64 |7042.69 |

|13 |7042.69 |422.56 |7465.25 |

|14 |7465.25 |447.91 |7913.16 |

|15 |7913.16 |474.79 |8387.95 |

|16 |8387.95 |503.28 |8891.23 |

|17 |8891.23 |533.47 |9424.70 |

|18 |9424.70 |565.48 |9990.19 |

|19 |9990.19 |599.41 |10589.60 |

|20 |10589.60 |635.38 |11224.97 |

A) What is the amount after 20 years?

B) How much interest was earned during the 20 years?

C) Was this calculated using simple or compound interest?

D) How do you know?

E) How many compounding periods were there per year?

F) Use the information in the spreadsheet to complete the graph on the next page. Title the graph “Amount of $3500 at 6%”, the horizontal axis “Year” and the vertical axis “Amount”. Describe the shape of the graph and what does it indicate?

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

13. The principal, interest rate and time are the same. Would the amount be larger if the interest was calculated using simple or compound interest? Explain why this would happen?

-----------------------

12000

11000

10000

9000

8000

7000

6000

5000

4000

3000

2000

1000

................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download