Financial Responsibility

Use simple interest to find the ending balance.

$34,100 at 4% for 3 years

How can a cardholder avoid paying interest on a credit card?

• Do not pay anything
• Pay the minimum payment after its due date
• Pay the minimum balance every month
•  Pay the balance in full every month

The simple interest formula is I=Prt. The P represents the principal. The principal is ___________________.

• the amount of money borrowed or deposited

• the amount taxed

• the percent interest for this year

• the amount the bank owes you for being a customer at their bank

What is important about how time is calculated in I= Prt ?

• it must be in months
• it must be in years
• it is not calculated

The compound interest formula is:
A = P(1 + r)^t

What does the A represent?

• The amount of interest earned.
• The amount of time that has passed.
• The total amount of money after a certain amount of time.
• The amount required to invest.

When you borrow money to buy something that costs more than you have.

• charge
• credit
• save
• interest

Money you pay when you borrow money, beyond the amount borrowed.

• saving
• interest
• credit
• banks

To put money away to use later is called_______.

• Spending

• Withdrawal

• Borrowing

• Saving