Financial Literacy STAAR Questions

A customer will borrow $12,000 to buy a car. Which loan option would allow the customer to pay the least amount of interest?

• A 4-year loan with a 5.2% annual simple interest rate

• A 5-year loan with a 4.2% annual simple interest rate

• A 6-year loan with a 4.7% annual simple interest rate

• A 3-year loan with an 8.4% annual simple interest rate

Two customers took out loans from a bank. - Henry took out a 4-year loan for $5,000 and paid 4.2% annual simple interest. - Ingrid took out a 6-year loan for $5,000 and paid 3.9% annual simple interest. What is the difference between the amounts of interest Henry and Ingrid paid for their loans?

• $417

• $150

• $60

• $330

Clarissa needs a $2,500 loan in order to buy a car. Which loan option would allow her to pay the least amount of interest?

• An 18-month loan with a 4.75% annual simple interest rate

• A 30-month loan with a 4.00% annual simple interest rate

• A 24-month loan with a 4.25% annual simple interest rate

• A 36-month loan with a 4.50% annual simple interest rate

Holly is taking out a loan in the amount of $10,000. Her choices for the loan are a 4-year loan at 4% simple interest and a 6-year loan at 5% simple interest. What is the difference in the amount of interest Holly would have to pay for each of these two loans?

• $1,600

• $3,000

• $4,600

• $1,400

Shakira has an investment account that she deposits $200.00 into each year. The table shows the amount of interest she earns in dollars and the ending balance each year. Shakira continues to deposit $200.00 each year and earns the same interest rate for several years. Which statement about the ending balance each year is true?

• The balance increases by 2% of the sum of $200.00 and $204.00 every year.

• The balance increases by 2% of $200.00 every year.

• The balance increases by 2% of the prior year’s ending balance.

• The balance increases by 2% of the sum of the prior year’s ending balance and $200.00.

A teacher opened an investment account at a bank. At the end of each year, the bank paid 6.4% annual simple interest on the money in the account. The table shows the activity in the account for three years.

• The balance in the account has grown only because regular deposits were made to the account.

• The balance in the account has grown because regular deposits were made to the account and interest was earned on the previous year's balance.

• The balance in the account has grown only because interest was earned on the account.

• There is not enough information to determine why the balance in the account has grown.

A deposit of $1,200 is made into each of two bank accounts. No additional deposits or withdrawals will be made for 4 years. - Account I earns 1.5% annual simple interest. - Account II earns 1.5% interest compounded annually. Which amount is closest to the difference between the balances of the two accounts at the end of 4 years?

• $1.64

• $72.00

• $73.64

• $1.80

A deposit of $7,912 is made into a new account that earns 5.75% simple interest. No additional deposits or withdrawals will be made for 2 years. Which amount is closest to the balance in the account at the end of 2 years?

• $9,732

• $7,924

• $8,822

• $8,848

A business owner invested $10,500 into an account that pays 1.2% annual simple interest. No additional deposits or withdrawals will be made. Which amount is closest to the interest earned on the account at the end of 4 years?

• $504

• $11,004

• $126

• $10,626

A business owner opens a new investment account with a $10,000.00 deposit: - The investment account earns 2.5% interest, compounded annually. - The business owner does not plan to make any deposits or withdrawals. How much interest will the investment account earn at the end of the first and second years? Move the correct answer to each box. Not all answers will be used.

The account will earn ​ (a)   ​ in interest at the end of the first year. At the end of the second year the account will have earned a total of​ ​ ​ (b)   in interest.

• $250.00
• 500.00
• 506.25
• 562.5
• 2500
• 5000
• 5625.00