Chapter 5 Test
Terms
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- annual percentage yield
- tells you how much interest a financial institution would pay on a $100 deposit for one year
- bank reconciliation
- a report that accounts for the differences between the bank statement and your checkbook balance
- money market account
- a savings account in which the interest rate varies from month to month
- debit card
- allows you to withdraw money or pay for purchases from your checking or savings account
- commercial bank
- a for-profit institution that offers a full range of financial services
- endorsement
- the signature of the payee, the party to whom the check has been written
- compounding
- the process in which interest is earned on both the principal-the amount you deposited-and on previously earned interest
- stop-payment order
- a request that an institution not cash a particular check
- certificate of deposit
- a time deposit that requires you to leave your money in a financial institution for a set amount of time
- rate of return
- the % of increase in the value of your savings from earned interest
- automatic teller machine
- computer terminals that let you withdraw cash from your account, make deposits, and transfer money from one account to another
- credit union
- a nonprofit financial institution that is owned by its members and organized for their benefit
- savings and loan association
- specialized in savings accounts and mortage loans
- overdraft protection
- an automatic loan made to you if you write a check for more money than you have in your account