CHAPTER 6 WORKSHEET
- 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 ______.
- Name three transactions that can be done at an ATM associated with your bank and by on-line banking and telephone banking.
- 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.
- 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.
- 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______
- 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 $1.05, plus the transaction fee, if applicable.
Kyle did the following banking one month:
Deposited a cheque at a teller 4 times
Wrote 4 cheques
Paid 5 bills on-line
Used his debit card 3 times
Deposited his rolled coins 2 times
Withdrew money 3 times from an ATM not associated with his bank.
What was the total monthly charge?
- A) Identify three savings alternatives available at banks.
B) Which alternative does not pay interest? ______
C) Which alternative pays more interest? ______
D)With which alternative do you have ready access to your money?
______
E)Which alternative has a risk? ______
- Which type of interest is described by this statement?
“The interest earned is re-invested, increasing the principal.”
______
- Calculate the simple interest and the amount for each of the following.
Interest
($) / Amount
($)
A) / $4500 at 5% per annum for 3 years
B) / $2000 at 3% per annum for 21 months
- Calculate the amount and the interest earned for each of the following.
Amount
($) / Interest
($)
A) / $4000 at 4% per annum, compounded semi-annually for 3 years
B) / $2000 at 12% per annum, compounded quarterly for 1 year
- Which is worth more after three years? How much more?
i) $100 earning 12% per annumii) $100 earning 15% per annum
compounded monthly simple interest
- Use the spreadsheet shown to answer the questions.
Principal ($): / 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
- 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?