Understanding Borrowing vs. Saving

What are the two options Frankie Finance has to acquire a new game console?

• Earning or inheriting

• Borrowing or saving

• Saving or investing

• Borrowing or spending

What does borrowing typically involve?

• Paying back with interest

• No need to return

• A one-time fee

• Keeping the borrowed item

What is interest in the context of borrowing?

• A fixed payment period

• A discount on early repayment

• A fee for borrowing money

• A reduction in principal

Which of the following is a way to save money?

• Setting aside a percentage of income

• Borrowing from friends

• Investing in stocks only

• Spending immediately

What is a benefit of creating a savings plan?

• Immediate access to funds

• Long-term financial security

• Paying back with interest

• None of the above

How long will it take Frankie to save $500 if she saves $10 each week?

• 2 years

• 1 year

• 52 weeks

• 50 weeks

What is the interest rate set by Frankie's parents for the loan?

• 0.01%

• 1%

• 5%

• 10%

How much total will Frankie pay back for a $500 loan including interest?

• $505

• $550

• $500

• $510

What is the term of the loan offered by Frankie's parents?

• Five years

• Six months

• Two years

• One year

What is the principal amount in Frankie's loan scenario?

• $500

• $510

• $495

• $505