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Details Title: Banking Notes Description: Banking Questions for chapter 4 Total Flash Cards: 21 Created: 04/27/2006 06:34:24	To study from this set of flash cards, or to create your own your own study flash cards, register HERE. If you are already a registered user, CLICK HERE.
Cards Term What is the most common form of a transaction account? Definition A checking account. Term What two categories does Deposit accounts generally fall into? Definition Transaction accounts, and time deposits. Term The higher the interest offered the higher the ___________? Definition The higher the minimum balance required. Term What is a Transaction Account? Definition An account that allows transactions to occur at any time and in any number. Term What is a Demand Deposit? Definition a deposit that are payable on demand whenever the depositor chooses. Term What happens if your balance falls below the level on any day of the month? Definition Higher service charges apply. Term What does ATS stand for? Definition Automatic Transfer Service Term What are Time deposits? Definition Deposits that are held for or mature at a specified time. Term What is Money Market deposit accounts? Definition they offer a higher rate of interest than savings accounts, but they usally require higher initial deposit to open an account. Term What is a Certificate of Deposit? Definition a certificate offered by a bank that guarntees payment of a specified interest rates until a date in the future. Term What is Interest? Definition the price paid for the use of money. Term What is the basic formula for caculating interest? Definition P X R X T = I Term What does the letter in the basic formula for caculating interest represent? Definition P is principal, R is rate, T is time, and I is interest. Term What is compound Interest? Definition Adding interest to the principal and paying interest on the new total. Term What does APR stand for? Definition Annual Percentage rate Term What is annual percentage rate? Definition the nominal rate on which interest is calculated per year. Term What does APY stand for? Definition annual percentage yield Term What serves as the nation's central bank? Definition The Federal Reserve or Fed. Term WHat do you call it when banks make and receive deposits on eachother? Definition Interbank transactions Term Who determines even interest rates? Definition Market forces Term How does the Federal reserve put more money into the economy? Definition By buying the U.S. government securites on open market.