BrainPop Interest Quiz

Banks offer interest as an incentive to customers who open accounts. What does "incentive" mean?

• Encouragement

• Punishment

• Trick

• Gift

Which of these is an opinion about interest?

• Most American banks offer interest rates below 10 percent

• Interest can be compounded yearly, monthly, or even daily

• An interest rate of 20 percent, compounded monthly, is far too high

• Interest is accrued on savings accounts, but rarely checking accounts

How can you compare simple and compound interest?

• Simple interest is paid on the principal plus accrued interest; compound interest is paid only on the principal.

• Compound interest is paid on the principal plus accrued interest; simple interest is paid only on the principal.

• Compound interest is paid out once a month; simple interest is paid out once a year.

• Simple interest is more difficult to calculate than compound interest.

Which of the following statements is true?

• The less money you borrow from a bank, the more interest you pay

• The more money you have in a bank, the less interest you accumulate

• The more money you borrow from a bank, the less interest you pay

• The more money you have in a bank, the more interest you accumulate

What is interest?

• The amount of money in a bank account at the end of a year

• The fee customers pay when they open a bank account

• The percentage that banks pay to keep a customer's money

• The amount of money used to open a bank account

Which of the following is true?

• You pay interest when you borrow money and earn interest when you loan money.

• You earn interest when you borrow money and pay interest when you loan money.

• You pay interest both when you borrow and loan money.

• You earn interest both when you borrow and loan money.

If your bank offers 6 percent annual simple interest, and you start with $60 in your account, how much will you have after one year?

• $70.00

• $66.30

• $63.60

• $66.00

Your bank offers 6 percent annual interest, compounded monthly. If you start with $500 in your account, how much will you have after 3 months?

• $501.50

• $507.54

• $550.00

• $595.51

What can you infer about compound interest from the information presented in the movie?

• It's not worth calculating unless you make a large initial deposit.

• It's easier to calculate than simple interest.

• Very few banks offer it.

• It allows people with savings accounts to accumulate more money than they would with simple interest.

If you were saving to purchase a house, which account would you likely use?

• Savings account

• Checking account

• Investment account

• Principal account