Multiple Choice
Sam paid an annual percentage rate (APR) of 6.5% on his loan, while Jessica paid an APR of 5.2% on hers. What is the difference in APR paid by Sam and Jessica?
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1. Introduction to Accounting
Useful Information
Multiple Choice
Which of the following is a primary disadvantage of not keeping your money in a bank?
A
You will automatically earn higher interest on your cash.
B
You are required to pay more taxes on your savings.
C
Banks will charge you a fee for not depositing your money.
D
Your money is not protected against theft or loss.
Verified step by step guidance1
Understand the context of the question: The problem is asking about the disadvantages of not keeping your money in a bank. This involves understanding the role of banks in safeguarding money and providing financial services.
Review the options provided: Analyze each option to determine its validity. For example, earning higher interest on cash is not automatic when money is kept outside a bank, and banks do not charge fees for not depositing money.
Focus on the correct answer: The key disadvantage of not keeping money in a bank is that it is not protected against theft or loss. Banks provide security measures such as insurance (e.g., FDIC in the U.S.) to protect deposits.
Consider the implications: Without the protection offered by banks, individuals face risks such as physical theft, misplacement, or loss due to unforeseen circumstances.
Conclude the reasoning: The correct answer highlights the importance of banks in safeguarding money, which is a fundamental concept in financial accounting and personal finance.
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