How Much Interest Will It Earn?
D2.Eco.10.3-5
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Choose the best answer. For math problems, choose the work that gives the right answer.
1.A bank pays 5% interest a year, which is $5 for every $100. How much interest does $100 earn in a year?
- A.$100 ÷ 5 = $20
- B.$100 ÷ $100 = 1; 1 × $5 = $5
- C.$100 + $5 = $105
2.Why does a bank pay interest on savings?
- A.It lends the money to borrowers and charges them interest
- B.The law says banks must give money away
- C.Interest is a prize for walking in
3.An account pays $5 a year for every $100 saved. The interest is paid out each year. How much interest does $400 earn in 2 years?
- A.4 × $5 = $20
- B.$400 + $5 = $405
- C.$400 ÷ $100 = 4; 4 × $5 = $20; 2 × $20 = $40
4.When you borrow money, who pays the interest?
- A.The lender pays it to the borrower
- B.Nobody pays interest on loans
- C.The borrower pays it to the lender
5.A CD pays $4 a year for every $100. A savings account pays $1 for every $100. How much more does $100 earn in the CD in one year?
- A.$4 − $1 = $3 more
- B.$4 + $1 = $5
- C.$100 + $4 = $104
6.Why does money left in a savings account longer earn more interest?
- A.Interest is paid for each year the money stays
- B.Banks forget to charge fees
- C.Old money is worth less
7.Lena's $100 earns $5 interest in a year. She leaves it all in the account. How much does she have after one year?
- A.$100 + $5 = $105
- B.$100 × 5 = $500
- C.$100 − $5 = $95
8.Carlos saves $200 in an account that pays $3 a year for every $100. How much interest does he earn in one year?
- A.$200 + $3 = $203
- B.$200 ÷ $100 = 2; 2 × $3 = $6
- C.$3 × 100 = $300
LessonPrint · D2.Eco.10.3-5 · Set 11 · free to copy for classroom use