Cash Course: Debt and Borrowing Money Review

Matching: Match the definition in Column A with the term in Column B.

• Financial Debt

• Money put into something with the hope of future benefit

• Appreciate

• Maximum amount of money a person is allowed to borrow

• Credit Limit

• Increase value over time

• Depreciate

• Borrowed money that is owed to a person or institution

• Investment

• Lose value over time

Tags

CCSS.6.RP.A.3B

The most common type of debt is consumer debt, accumulated mainly through the use of _______.

• Cash

• Checks

• Debit cards

• Credit cards

Which of the following is an example of a loan on something that will probably depreciate over time?

• Home loan

• Car loan

• Student loan

• None of the above

When using debt to purchase something, why do you usually end up paying more for it than the initial price tag?

• Lenders charge interest

• The price goes up

• You add a tip

• All of the above

True or False: Debt can be a good thing if you use it to invest in your future.

• true

• false

What is the most responsible way to use debt to make it work for you?

• Using debt to invest in appreciating assets like real estate or education.

• Using debt to purchase luxury items that depreciate quickly.

• Using debt to cover daily expenses without a repayment plan.

• Using debt to gamble in high-risk investments.

Match the definition in Column A with the term in Column B.

• Interest

• Money paid in advance to lower the amount borrowed

• Down Payment

• Something valuable you own that secures a loan

• Collateral

• A word for the amount of money borrowed

• Principal

• A type of loan backed by other assets

• Secured Loan

• An extra fee charged for borrowing money

True or False: Borrowing money is always a bad idea.

• True

• False

Tags

CCSS.RL.11-12.6

What is the annual interest on a $1,000 loan with a 5% interest rate?

• $5

• $50

• $500

• $5,000

Tags

CCSS.7.RP.A.3

How do banks make money on loans?

• They ask for tips

• They charge interest

• They charge for appointments

• They don’t make money on loans