Question

Kristi deposits, or invests, her paycheck in a savings account. The bank can then offer some of the money to a borrower in the form of a loan. How can Kristi benefit financially from this relationship?

A)
Kristi can earn interest on her original deposit.
B)
Kristi can feel good that she supported a borrower.
Eliminate
C)
Kristi can choose to invest her money in another bank that doesn't make loans to borrowers.
D)
Kristi can decide to take her money out the savings account before the loan is made to save money.

Answer 1

hint: banks charge interest on loans to borrowers

so your answer will be A. Kristi can earn interest on her original deposit.

explanation: When Kristi deposits her paycheck, her investment can benefit her financially because she can earn interest on her original deposit. How much interest she can earn will depend on the bank or financial institution.

Answer 2

Answer: option A) Kristi can earn interest on her original deposit.

That is how the banking system works. A lot of people deposit (invest) the money that they are not using at the moment, for which the banks pay them (interests) and the bank can lend the moneyto other people who want/need the money (for which the banks charges interests).