Between Savers and Borrowers: teacher key

How Banks Work, grade 7 edition, written for 7th grade. Banks stand between people who save and people who borrow. Read how they earn money, set interest, handle checks and cards, and stay insured.

Read the book. Print this page for the key.

Questions and answers

1. Who does the money in a bank belong to?
   • The bank's owners
   • Its depositors (answer)
   • The Fed
2. What is one of a bank's main ways to make money?
   • Charging interest on loans (answer)
   • Selling checks
   • Printing cash
3. What do loans that seem risky carry?
   • Less interest
   • More interest (answer)
   • No interest
4. What does the word overdraft mean?
   • A plan for saving up extra money
   • A purchase past the account's balance (answer)
   • A new card for paying bills later

Words

• Lenders: those who lend
• overdraft: spending past balance
• compound: interest on interest
• district: area served