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.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.$400 + $5 = $405
- B.$400 ÷ $100 = 4; 4 × $5 = $20; 2 × $20 = $40
- C.4 × $5 = $20
2.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
3.Why does money left in a savings account longer earn more interest?
- A.Banks forget to charge fees
- B.Interest is paid for each year the money stays
- C.Old money is worth less
4.A savings account pays $2 a year for every $100 saved. How much interest does $300 earn in one year?
- A.$2 × 100 = $200
- B.$300 + $2 = $302
- C.$300 ÷ $100 = 3; 3 × $2 = $6
5.$50 in a piggy bank earns $0. $50 in a savings account earns $1 a year. After 3 years, how much more is in the account?
- A.$50 + $1 = $51
- B.$50 × 3 = $150
- C.3 × $1 = $3 more
6.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.$100 + $4 = $104
- B.$4 + $1 = $5
- C.$4 − $1 = $3 more
7.Why does a bank pay interest on savings?
- A.Interest is a prize for walking in
- B.It lends the money to borrowers and charges them interest
- C.The law says banks must give money away
8.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 = $500
- B.$100 − $5 = $95
- C.$100 + $5 = $105
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