Economics - Interest and compound interest

What is a bank account?

• A safe place to store your money

• I place where you pay for purchases

• A card used for buying things

• A place to keep your clothes

What is interest?

• A discount at the shops

• A type of fee you pay when you use cash

• A fee for borrowing clothes

• A reward for saving money in the bank

Which of the following is an example of compound interest?

• Earning interest on your savings and the interest you’ve already earned

• Paying interest once a year

• Not earning any interest at all

What is a loan?

• A gift from a friend

• A type of toy

• Money borrowed that must be paid back with interest

• Money that grows on trees

The more often interest is added to your savings, the faster your money grows.

• True

• False

You never have to repay a loan.

• True

• False

Compound interest means you earn interest on your original money and the interest added.

• True

• False

A budget helps you spend more money than you have.

• True

• False

Which of the following is a benefit of saving money in a bank?

• You lose your money over time

• Your money disappears

• You earn interest on your savings

• You have to pay more taxes

Which of the following actions would help grow your savings the most over time?

• Spending all your money

• Saving in a jar at home

• Putting your money in a bank that offers compound interest

• Hiding money under your bed