5.2 Borrowing Money

When borrowing money, the interest is

• how interested you are in borrowing money

• the cost you must pay in order to borrow money

• the extra money you gain when borrowing money

• the amount of money that you need to borrow

Select all the accurate descriptions associated with borrowing money from a bank or company.

• Borrowing money is free. Banks and businesses help you out of the kindness of their hearts.

• You must pay banks and businesses a fee when borrowing money.

• You should only borrow money from banks and businesses when you have no other choice.

• It's recommended to borrow money often from banks and businesses to buy nicer things for yourself.

• Credit card companies are a form of borrowing money with associated costs.

If you must borrow money, a high interest rate will

• increase the amount of interest you pay

• decrease the amount of interest you pay

• have no effect

• ensure that more people are interested in borrowing money

If you must borrow money, taking a long time to pay it off will

• increase the amount of interest you pay

• decrease the amount of interest you pay

• have no effect

• ensure that your kids will pay your debt for you

If you must borrow money, having a larger down payment will

• increase the amount of interest you pay

• decrease the amount of interest you pay

• have no effect

• ensure that your money is kept safe down in a hole

If you must borrow money, a low interest rate will

• increase the amount of interest you pay

• decrease the amount of interest you pay

• have no effect

• ensure that not many people are interested in borrowing money

If you must borrow money, paying off the loan over a shorter amount of time will

• increase the amount of interest you pay

• decrease the amount of interest you pay

• have no effect

• ensure that friends will help you pay your debt tomorrow

If you must borrow money, making a smaller down payment or no down payment will

• increase the amount of interest you pay

• decrease the amount of interest you pay

• have no effect

• ensure that most of your money is above ground

Select all preferred behaviors associated with borrowing money.

• shop around for a low interest rate

• give Mrs. D all of your money

• ask Mrs. D for all of her money

• take a long time to pay it off

• pay it off as soon as you can