edHelper.com

Interest You Pay

Interest You Pay
Reading Level
     edHelper's suggested reading level:   high interest, readability grades 5 to 7
     Flesch-Kincaid grade level:   4.23

Vocabulary
     challenging words:    mortgage, multiplies, rates, monthly, solution, especially, payment, multiply, rate, minimum, cash, basis, banks, calculate, amount, percentage

Print Interest You Pay
edHelper.com subscriber options:
     Print Interest You Pay  (font options, pick words for additional puzzles, and more)
     Quickly print reading comprehension
     Print a proofreading activity

Feedback on Interest You Pay
     Leave your feedback on Interest You Pay  (use this link if you found an error in the story)

Interest You Pay
By Patti Hutchison 		  
1     Do you have a car loan or a mortgage? Do you use credit cards? If so, you pay interest. What is interest, and how does it work?
 
2     Whenever a bank or business loans you money, they charge interest. Interest is extra money you pay back on the money you borrowed. Interest is figured on a percentage basis.
 
3     For example, let's say you borrow $10,000 to buy a car. You get a great interest rate of seven percent A.P.R. (A.P.R. means annual percentage rate.) You are going to pay back the loan over five years.
 
4     The bank calculates your interest. They multiply the $10,000 by seven percent. It comes out to $700. This is the amount of interest you pay for one year. Then the bank multiplies that by five years. The total interest you will pay on your car loan is $3500. This means that if you pay all 60 payments, you will actually pay $13,500 for your car that only cost $10,000.

Paragraphs 5 to 12:
For the complete story with questions: click here for printable
Copyright © 2008 edHelper