ECONOMICS
MONEY MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Keeping cash hidden in your closet
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Spending money from your piggy bank
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using birthday money to make a purchase
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Borrowing money from a stranger with a promise to pay back more than you borrowed.
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Detailed explanation-1: -Credit allows you to get money upfront with the promise to repay it in the future, often with interest. Creditworthiness refers to a borrower’s ability to pay what they’ve borrowed. Lenders judge creditworthiness in many different ways, and they may use things like credit reports and credit scores to help.
Detailed explanation-2: -The five Cs of credit are character, capacity, capital, collateral, and conditions.
Detailed explanation-3: -The principal–the money that you borrow. The interest–this is like paying rent on the money you borrow.
Detailed explanation-4: -Interest-Interest is the additional amount you will pay to a lending institution to borrow money. In terms of savings, interest is the additional amount you will earn for having your money in a bank account or other savings vehicle.