Saving, credit and interest

Worksheet: Saving, credit and interest

Name:Class:

Answer the questions.

1. How much simple interest does $200 earn at 5% per year over 3 years?
   a) $10b) $25c) $30d) $60
2. $100 earns 10% compound interest per year. What is the balance after 2 years?
   a) $110b) $120c) $121d) $131
3. Compound interest is paid on the original money and on interest already added.
   a) Trueb) False
4. $1000 at 10% a year for 2 years: how much more interest is compound than simple?
5. A savings account raises its interest rate. What does this mean for the saver?
   a) They earn less interestb) They earn more interestc) They must save mored) They pay a fee
6. What is an emergency fund mainly for?
   a) Buying the latest gadgetb) Holiday treatsc) Paying for planned fund) Unexpected costs, like a repair
7. If prices rise faster than interest, savings can buy less over time.
   a) Trueb) False
8. You borrow $1000 and repay $1100 in total. What is the extra $100 called?
   a) A budgetb) A depositc) A refundd) Interest
9. On a loan or credit card, what does APR stand for?
   a) Annual payment recordb) Annual percentage ratec) Applied personal rated) Average payment ratio
10. Paying only the minimum on a credit card each month is the cheapest way to clear it.
    a) Trueb) False
11. Someone is worried about repaying a debt. What is a sensible first step?
    a) Borrow more to hide itb) Hope it goes awayc) Ignore the lettersd) Talk to the lender or an advice service
12. What word describes a person or bank that lends money?
13. Why can an unpaid debt grow bigger over time?
    a) Interest keeps being addedb) Prices always fallc) The debt is shared outd) The lender gives a bonus
14. Which of these is a want rather than a need?
    a) A safe place to liveb) Basic healthy foodc) Clean drinking waterd) The newest games console
15. You want a costly item. Which habit helps you spend wisely?
    a) Buy it right awayb) Copy what friends buyc) Use up all your savingsd) Wait a few days before buying
16. What is a plan that lists your income and what you will spend called?