Interest Rates Quiz

What do higher interest rates encourage?

• Spending

• Saving

• Borrowing more

• Traveling

What do lower interest rates promote?

• Saving

• Spending

• Reducing debt

• Increasing taxes

What is used as collateral in a title-pawn loan?

• Pay stub

• Car title

• Membership

• Deposit

What is a tip for finding the best interest rates?

• Apply for as many loans as possible

• Shop around for the best rates

• Use only one institution

• Avoid comparing rates

What should you be cautious about when applying for loans?

• Submitting too many applications

• Submitting too few applications

• Applying only to banks

• Applying only to credit unions

Which type of loan is typically associated with high interest rates?

• Credit unions

• Banks

• Payday loan

• Savings account

What happens if you pay only the minimum due on a credit card?

• It leads to lower interest charges over time

• It leads to higher interest charges over time

• It eliminates interest charges

• It has no effect on interest charges

What is an example of APR calculation mentioned in the text?

• 20% APR equals 20% on the first bill

• 20% APR is divided by 12 for a monthly rate

• 20% APR is divided by 365 for a daily rate

• 20% APR is the same as 20% interest

What is the relationship between APR and interest charges over time?

• Paying only the minimum due reduces interest charges

• Paying only the minimum due increases interest charges

• APR has no effect on interest charges

• APR eliminates interest charges

What is simple interest calculated on?

• Total amount, including previously earned interest

• Initial amount only

• Amount after a fixed period

• Amount after a variable period