Bank accounts, fees, and protecting yourself from fraud

Grade 12 Social Studies Worksheet - Challenge Me

Circle the best answer.

1. Read this first

   Use this

   Cards A to C on inflation, the federal funds rate and mortgages. Card A, "Prices and the federal funds rate". Compare chart "Prices and the federal funds rate" (U.S. Bureau of Labor Statistics and Board of Governors of the Federal Reserve System, through FRED, retrieved Nov 14, 2026), columns Year | CPI-U (1982-84 = 100) | Effective federal funds rate (%): 2019 | 255.657 | 2.16; 2020 | 258.811 | 0.38; 2021 | 270.970 | 0.08; 2022 | 292.655 | 1.68; 2023 | 304.702 | 5.02; 2024 | 313.689 | 5.14. Note: the CPI-U is a price index: a rise means higher prices. The effective federal funds rate is the rate banks charge each other for overnight loans, the rate the Federal Reserve steers. Both are annual averages. Card B, "The 30-year mortgage rate". Compare chart "The 30-year mortgage rate" (Freddie Mac Primary Mortgage Market Survey, through FRED, retrieved Nov 14, 2026), columns Year | 30-year fixed mortgage rate (%): 2021 | 2.96; 2022 | 5.34; 2023 | 6.81; 2024 | 6.72. Note: each rate is the average of weekly survey values for the year. Card C, "Tomas's loan" (made up). On January 1, 2021, Tomas borrowed $200,000 from a lender at a fixed 3% a year. The rate stays at 3% for the whole loan.

3. 1.

   Ari combines cards A and C. Which statement about Tomas's fixed 3 percent loan in 2022 is best supported?

   • The lender's loan lost real value in 2022: 3 percent against 8.0 percent inflation, real rate near −5
   • Tomas lost, since each dollar owed became larger when prices rose
   • Nothing changed, since a fixed rate fixes the value of each payment
   • The lender gained, since 3 percent beats the 1.68 percent funds rate that year
4. 2.

   A student claims card B shows mortgage rates moved one for one with the federal funds rate in 2021 to 2023. Bo tests it. What is the verdict?

   Use the picture in question 1.

   • Not supported: the funds rate rose about 4.9 points but the mortgage rate rose about 3.9
   • Supported: both rates rose together in each year from 2021 to 2023, so they moved one for one
   • Not supported: the mortgage rate rose more than the funds rate
   • Supported: the mortgage rate rose because the Fed raised its rate
5. 3.

   Esme compares the mortgage rate with price rises for 2022 to 2024. Which claim do cards A and B best support?

   Use the picture in question 1.

   • Mortgage rates were higher in 2023 than in 2022
   • Mortgage rates followed inflation down once price rises slowed
   • A new mortgage cost more than inflation in each of the three years, since each rate was above 5 percent
   • A new mortgage cost less than inflation in 2022 but more than inflation in 2023 and 2024
6. 4.

   Jun wants to test whether higher funds rates cause higher mortgage rates. Which missing evidence would matter most?

   Use the picture in question 1.

   • How many mortgages were signed in each year, as a measure of how many people borrowed
   • Whether mortgage rates rose before the Fed acted, when lenders expected the rise
   • Average hourly pay in 2022 and 2023
   • The funds rate for 2019 and 2020

7. Use this

   Card A on a deposit market (made up). Compare chart "Deposits at an invented bank, by interest rate" (made up for practice), columns Interest rate | Savers supply now ($ millions) | Savers supply after some leave ($ millions) | Banks want now ($ millions) | Banks want after a change ($ millions): 1% | 100 | 40 | 200 | 240; 2% | 120 | 60 | 170 | 210; 3% | 140 | 80 | 140 | 180; 4% | 160 | 100 | 110 | 150; 5% | 180 | 120 | 80 | 120; 6% | 200 | 140 | 50 | 90. Note: made up for practice. The market starts where the first supply column meets the third column. In the first move, banks want more deposits at every rate. In the second move, some savers shift money out of deposits at every rate.

8. 5.

   Milo asks why deposits ended lower even though banks wanted more. Which claim does card A best support?

   • Whenever savers leave, deposits end lower, whatever banks want
   • Here the savers' move (60 less at each rate) outweighs the banks' (40 more), so the total ends at 120
   • Banks' extra demand of 40 outweighed the savers' move, so total deposits ended lower than before
   • Savers left because the rate rose, which is why deposits ended lower
9. 6.

   A writer claims the higher rate shows savers left for rivals. Noah tests it against card A. What is the verdict?

   • Refuted: deposits fell just a little, so savers did not leave
   • Weakly supported: banks' extra demand also lifts the rate, so the rate alone cannot split the moves
   • Shown: a higher rate means savers have left this bank for a rival that offered them more on deposits
   • Unsupported: the card does not name the rival banks

10. Use this

    Card A, "A balance-transfer offer" (made up). Dani owes $3,000 on Card Old at 24% APR, which is 2% a month. Card New offers a transfer of the $3,000 for a 3% fee ($90, added to the balance), 0% interest for 12 months, then 27% APR, which is 2.25% a month. Card B, "After 12 payments" (calculated from card A). If Dani pays $200 a month for 12 months: Card Old leaves $1,122 owed, and Card New leaves $690 owed. If Dani pays $100 a month for 12 months: Card Old leaves $2,464 owed, and Card New leaves $1,890 owed.

11. 7.

    Pia pays $200 a month on either card. Which statement about the transfer after 12 payments is best supported?

    • The transfer saves $90, the amount of the fee
    • The transfer leaves Dani $432 better off after the $90 fee, since Card Old's interest was about $522
    • The transfer saves $1,122, the balance left on Card Old
    • The transfer costs Dani $90 and saves nothing, since the balance is unchanged after 12 payments of $200
12. 8.

    Ren compares both cards after 12 payments of $100 a month. Which statement is best supported?

    • Card Old is cheaper, since 24 percent is below 27 percent
    • The gap is $432, the same as with $200 payments
    • Card New leaves $574 less owed, but from month 13 its 27 percent rate is above Card Old's 24
    • Card New leaves $574 less owed, so it stays the cheaper card however long Dani takes to pay it off
13. 9.

    An ad says the 3 percent fee is the price of the offer. Tala looks for the strongest objection from cards A and B. Which is it?

    • The fee is added to the balance, so it also earns interest from month 13 on, which raises the true price of the offer
    • Dani would pay no interest on Card New, so the price is $90
    • The price also includes 27 percent on whatever is left after month 12, set against the 24 percent avoided
    • A 3 percent fee is large, so the offer must cost more than Card Old
14. 10.

    A website claims balance transfers always save money. Zee tests this against cards A and B. What is the best verdict?

    • Unsupported: the card does not name the lender
    • Shown: both payment sizes left less owed on Card New, so a transfer saves money for any payment size and any offer
    • Refuted: the $90 fee means Dani ends up worse off
    • Weakly supported: two payment sizes favor it, but the fee, the 27 percent rate and slow payments can reverse it