Answer the questions.

1. What are the main reasons for~saving money?

2. What are the advantages of depositing money?

3. Why does a financial institution lend money?

4. What economic factors affect saving rate?

5. What types of savings accounts do you know?

6. What are the main reasons for borrowing money?

7. How can people profit by using credit?

8. Why does the borrower put up collateral?

9. What is the most common type of mortgage?

10. What kind of applicants receive a high credit rating?

13* Say if the statements are true or false. Prove your point.

1. The fee that a financial institution pays for the use of depositors' money is collateral.

2. Credit is the purchase of goods and services without the actual transfer of money on the promise to pay later.

3. The shorter the loan period is, the smaller the monthly amount the consumer must pay.

4. A financial institution charges interest on loans to make money.

5. The money borrowed is called the interest.

6. The mortgagee must repay the mortgage in installments for fixed number of years, usually between 15 and 30 years.

7. A financial institution makes a profit by charging more interest on loans than it pays on deposits.

8. When consumer goods are adequate to meet consumer demand and prices are lower, the savings rates are high.

9. When consumer demand is greater than the supply of consumer goods and prices are high, the savings rates are low.

10. A credit rating is an estimation of the probability of repayment.

14* Complete the sentences matching the beginning of the sentence with one of the endings.

l.A financial institution pays interest on savings deposits______________________.

2. A common type of savings accounts among financial institutions is_________________________.

3. The length of repayment of the loan is important in_____________________

4. Even wealthy consumers consider the use of credit necessary_______________.

5. Credit payments for televisions, major appliances, and other expensive items__________________________.

6. The amount paid by the borrower for the privilege of using the money________________.

7. The money market account offers variable interest rates_________________.

8. If the loan is not repaid according to the terms of the agreement________________.

9. The loan is secured by the property, which is forfeited if___________________.

10. The creditor evaluates information about the purchaser and .__________.

a. usually run from one to five years

b. the loan terms are not met

c. determining the amount of the monthly payment

d. assigns that person a credit rating accordingly

e. when purchasing expensive items such as houses and automobiles

f. to attract a pool of money it can lend

g. that are usually higher than those of regular savings or NOW accounts

h. the lender may take the borrower's collateral

i. is called the interest

j. a regular savings account, or a passbook account

2. Money is a terrible master but an excellent servant. However

_________________________________________________________________

3. Before you start up a new business I'd advise you to write a business plan.

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