Savings and Loans

What is "interest" when talking about savings or loans? Tick all correct answers

• The money paid to you by the bank for the money you save with them

• The amount of money you borrow from the bank

• Whether the bank's adverts are entertaining or not

• The amount of money you are charged by the bank for borrowing money

• None of the above

If an interest rate is quoted as 6.5%, what is this as a decimal?

• 65.0

• 6.5

• 0.65

• 0.065

• 0.0065

The formula for working out simple interest is I = Prt. P is the Principal - what is this?

• The head of the college

• A set of values

• The amount of money borrowed or saved

• The interest rate per year

If you take out a loan, what level of interest rate should you look for?

• As high as possible

• Somewhere in the middle

• The lowest you can find

• It doesn't matter; it makes no difference

What does "t" mean in both the simple and compound interest formulas?

• The interest rate

• The tax rate

• The time in months

• The time in years

To earn as much interest as possible on your money, you should open a __________ account that ________ interest and has the ______________ interest rate.

• loan; pays; middle

• loan; charges; lowest

• savings; charges; prettiest

• savings; pays; highest

What is an unsecured loan?

• A loan where you lose the paperwork

• A personal loan taken out without providing security

• A loan you don't have to re-pay

• There is no such thing

What is a secured loan?

• The same as an unsecured loan

• Money you lock in a safe

• A loan with worse interest rates than an unsecured loan

• A loan taken out against an asset you own, for example a house

What is APR?

• Nothing to do with savings or loans

• Annual Percentage Rate of interest, a way of comparing different financial products

• Alluvial Parsnip Ratio

• The amount you wish to borrow from a bank

What is a common feature of payday lenders such as Sunny or QuickQuid? Give all answers that apply

• Very high Annual Percentage Rates

• They specialise in long-term loans

• They do not charge you if you fail to pay back toe money on time

• They are intended for short-term borrowing of just few days or weeks

• They are the safest people to borrow money from