What I may already know: • People can borrow money from a financial institution if they need to. • Money that is borrowed from a financial institution must be paid back with interest.
Learning Intentions
In this chapter, I will learn: • What borrowing is and why people borrow. • Where money can be borrowed from. • The different borrowing options available. • How to calculate the cost of a loan. • The rights and responsibilities of borrowers. • The risks associated with borrowing.
When a person does not have enough money to buy the things they need or want with cash, they have the option of borrowing money from a financial institution. Borrowing is also called buying on credit.
In chapter 7, we learned that a person who saves money with a financial institution will earn interest. If a person borrows money from a financial institution, they must pay interest on that sum. It costs money to borrow money.
i 94
Borrowing is getting a sum of money from a financial institution which must be paid back with interest.
