What is the primary function of an interest rate in the context of loans?

Exploring Interest Rates: Fixed vs. Variable

Interactive Video
•
Mathematics
•
1st - 5th Grade
•
Hard

Emma Peterson
FREE Resource
6 questions
Show all answers
1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
To record the transaction details
To provide insurance on the borrowed amount
To calculate the extra amount paid over the borrowed sum
To determine the repayment time
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
How does a variable interest rate differ from a fixed interest rate?
It is always higher than fixed rates
It offers less predictability in monthly payments
It fluctuates based on financial market changes
It remains constant throughout the loan period
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What could be a potential benefit of choosing a variable interest rate for a loan?
Fixed monthly payments
Higher initial rates
Less predictability
Lower initial rates which might save money
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Why might someone prefer a fixed interest rate on a loan?
Initial rates are lower than variable rates
The rate can decrease based on market conditions
It changes frequently, providing flexibility
Predictable monthly payments facilitate easier budgeting
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which type of interest rate remains the same throughout the life of the loan?
Variable interest rate
Flexible interest rate
Adjustable interest rate
Fixed interest rate
6.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What should you discuss with your student loan lender to make an informed decision?
Only the benefits of variable interest rates
Repayment schedules only
Options between variable and fixed interest rates
Only the benefits of fixed interest rates
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