Personal Finance Review

Define Interest

• The amount of money paid for the use of borrowed money

• A type of bank account

• A financial statement

• A type of investment

List the 4 types of financial institutions

• Commercial Banks, Credit Unions, Investment Banks, Insurance Companies

• Supermarkets, Retail Stores, Online Shops, Malls

• Hospitals, Clinics, Pharmacies, Laboratories

• Schools, Colleges, Universities, Libraries

Interest charged on loan is defined as:

• The amount paid by the borrower to the lender for the use of borrowed money

• The principal amount of the loan

• The total amount of the loan including interest

• The duration for which the loan is taken

Interest earned on deposit is defined as:

• The amount of money paid by the bank to the depositor for keeping money in the bank

• The principal amount deposited in the bank

• The total amount of money in the depositor's account

• The fees charged by the bank for maintaining the account

Why does the interest rate charged by financial institutions differ from the interest rate paid by financial institutions to depositors?

• Because financial institutions aim to make a profit

• Due to government regulations

• To attract more depositors

• Because of inflation

What financial services are offered by banks?

• Savings accounts

• Car rentals

• Grocery delivery

• Pet grooming

What financial services are offered by credit unions?

• Savings accounts and loans

• Real estate services

• Stock trading

• Cryptocurrency exchange

What financial services are offered by payday lenders

• Short-term loans

• Investment advice

• Mortgage lending

• Credit card services

What financial services are offered by title pawn lenders?

• Car title loans

• Mortgage refinancing

• Credit card issuance

• Savings accounts

Why do financial institutions charge different interest rates on different types of loans?

• Due to varying risk levels associated with different loans

• Because of the institution's profit margins

• To attract different types of customers

• Based on the loan amount