The Bank's Big Pool of Money: teacher key

How Banks Work, grade 3 edition, written for 3rd grade. Banks pool savings and lend the money out. Borrowers pay interest, and the bank passes a small part to savers. The FDIC protects money in banks.

Read the book. Print this page for the key.

Questions and answers

1. What do banks combine into one pool?
   • Many savings (answer)
   • Jars and bags of old coins
   • Ice and snow in winter
2. What is interest for a borrower?
   • A kind of machine that counts coins
   • The price of using someone else's money (answer)
   • A free gift from a bank
3. How much does 3 percent interest add to $100 in a year?
   • $30
   • $3 (answer)
   • $13
4. Who pays the bank interest?
   • The FDIC
   • Burglars
   • Borrowers (answer)
5. What is taking money out of an account called?
   • A withdrawal (answer)
   • A mortgage
   • A discount
6. What does the FDIC do if a bank fails?
   • Closes the road for the bank
   • Lends money to burglars
   • Protects money in banks (answer)

Words

• deposit: money put in
• borrow: use others' money
• interest: price of borrowing
• savers: people saving money