1. Borrowing Why do we borrow money? Where can you borrow money from? Advantages vs Disadvantages

2. This is Sunil…. PERSONAL INFORMATION 25 years old. Very good job as a computer programmer. Earns £2000 a month. Spends £1900 a month on rent, food and other expenses. How much money does he have spare a month? He wants to buy a SatNav system for his car, which is £200. What should he do? 1. Buy it on his credit card, which has an APR of 10%. 2. Take out a loan from a bank, for the extra hundred that he needs. The loan has an APR of 6%.

3. This is Andrew…. PERSONAL INFORMATION He is 18 years old. He is a student with a part-time job that pays him £40 a week. He has about £5 a week left after he has paid his rent and bought food. How much money does he have spare a month? He wants to buy a new games console for £200. What should he do? 1. Save £5 a week until he has saved the £200 he needs. How long will it take? 2. Buy it on credit from a games shop, which has an APR of 29.9%. 3. Put £20 a month into a saving scheme which gives him 5% interest each month.

4. This is Tolu…. PERSONAL INFORMATION She is 14 years old. She gets £5 a week pocket money, which she can spend on whatever she likes. She doesn’t spend much and at the end of the year usually has around £100 sitting around in her money jar. What should she do with her £100? What should she do? 1. Put the £100 into a savings account, with an simple interest rate of 5% for 2 years 2. Put the £100 into a savings account with a compound interest rate of 9% for 3 years.

5. This is John…. PERSONAL INFORMATION He is 24 years old. He has a low-paid job and is always in debt. He owes the bank £1000 but is struggling to pay it back. His car has failed its MOT and he needs a new one. The cheapest car he can find is £500, but the bank will not lend him any more money. What should he do? 1. Borrow the £500 from a loan shark, who charges an APR of 60%. 2. Go to a different bank and get a loan for £500 on an APR of 15%.

6. This is Vijay…. PERSONAL INFORMATION She is 20 years old. She has just started work as a trainee accountant. Her wages are £80 a week, but this will go up a lot when she gets more qualified. She wants to buy a car for £1000. What should she do? 1. Get a car loan from the garage where she buys the car. The APR is 12% for 3 years (compound interest) 2. Get a bank loan. The APR is 9.5% for 4 years (compound interest)

7. This is Carl…. PERSONAL INFORMATION He is 18 years old. He is not very good with money, but he has just got a part-time job, which pays £20 a week. He owes his mum £30 and his mate £10. How much does he owe in total? He wants to treat himself to some new £40 trainers when he gets his first pay packet at the end of the week. What should he do? 1. Save up for 2 weeks and buy the trainers. 2. Pay off his mate and his mum first, and then save up for the trainers. 3. Get a pay day loan for £80 with an interest rate of 48%

8. This is Emily…. PERSONAL INFORMATION She is 21 years old. She works in a shop. She has £100 a month left over after she has paid all her living costs. She is not a big spender. What should she do with her left over money? What should she do? 1. Set up a regular savings account with an interest rate of 5%. Can get money out whenever she wants. 2. Set up a high-interest savings account with an interest rate of 8%. Have to leave the money in all year. 3. Leave the money is her bank account in case she needs it. This has an interest rate of 3.5%.

9. This is Kim…. PERSONAL INFORMATION She is 18 years old. She has just started as a college student. Her rich Uncle has given her £10,000 to spend on “her future”. She wants to invest some of the money on a new car. She plans to keep the car for 4 years. What should she do? 1. Buy a car for £5,300 that will depreciate at a rate of 17% each year 2. Buy a car for £7,700 that will depreciate at a rate of 19% each year 3. Buy a car for £10,000 that will depreciate by 21.3% each year

10. Viv wants to invest £ 2000 for 3 years in the same bank. At the end of 3 years, Viv wants to have as much money as possible. Which bank should she invest her £ 2000 in? Plenary question GCSE Grade B Higher tier question