Question 6 • TX-Personal Financial Literacy and Economics
Which statements describe how interest is part of banking? Choose two correct answers.Deposits pay interest on loans.Borrowers pay interest to banks.Borrowers pay interest on checking account deposits.Banks pay interest on savings account deposits.Banks pay interest to borrowers.
Answer
A
Deposits pay interest on loans.
B
Borrowers pay interest to banks.
C
Borrowers pay interest on checking account deposits.
D
Banks pay interest on savings account deposits.
E
Banks pay interest to borrowers.
Explanation
Borrowers pay interest to banks when they repay loans, so B is correct. Banks may pay interest to customers who keep money in savings accounts, so D is also correct. Deposits themselves do not pay interest on loans; the bank pays any interest earned on deposits to the account holder.
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