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Individual Development Account

Checking and Savings Post-Test

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1. An Individual Development Account savings account is one type of individual account.

True or False

2. You never earn interest on a checking account. Only savings accounts pay interest.

True or False

3. The Rule of 72 means that you have to make 72 deposits in a year to earn any interest on your account.

True or False

4. A Corporation is a legal entity or artificial person created by state or national law.

True or False

5. It is just fine to write a check in pencil.

True or False

6. How old do you have to be to open a senior account?

a) 21

b) 65

c) That depends upon the bank, but usually at least over age 50.

7. When should you reconcile (balance) your checking account?

a) As soon as you can after the monthly account statement arrives.

b) Save up the statements and balance once a year.

c) Don’t bother. The bank is always right. Just enter their balance in your checkbook register.

8. What is wrong with having a check with a blank endorsement in your pocket?

a) Blank endorsements are illegal.

b) A check with a blank endorsement is just the same as cash. If you loose the check anyone who finds it can cash it.

9. If you have $1,000 deposited into a certificate of deposit that pays 12% interest, how long would it take for that account to be worth $2,000 or double the balance now. (Hint: use the Rule of 72)

a) 20 years

b) 6 years

c) 4 years

d) forever

10. Do you need an Individual Retirement Account (IRA) if you have a pension plan at work?

a) You can’t. IRAs are for self-employed people only.

b) Yes, if you are within income guidelines.

c) No, the pension is enough.

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