Leo is preparing for a vacation in which he will need to catch a flight. He needs spending money but his luggage cannot exceed 50 lbs. Luckily, Leo is able to withdrawal cash from the ATM to keep in his wallet. The paper bills will not add weight to his luggage and he can purchase snacks on the plane! Question 1. Which characteristic of money does this illustrate?
A. durability
B. portability
C. divisibility
D. uniformity
Question 2. You buy a candy bar for 50 cents. A year later, you go to buy the same candy bar and it's 55 cents. This is an example of...
A. interest rate
B. deflation
C. inflation***
D. wage
Question 3. Calculate the Simple Interest: How much interest does a $9.66 investment earn at 10% over 8 years?
A. 96 cents
B.$8.97
$7.73
zero
Question 1. The characteristic of money illustrated in the scenario is "B. portability." Money needs to be easily portable so that it can be carried and used conveniently in different locations. In this case, Leo is able to withdraw cash from the ATM and carry it in his wallet without it adding weight to his luggage.
Question 2. The correct answer is "C. inflation." Inflation refers to the increase in the general price level of goods and services over time. When the price of the candy bar increases from 50 cents to 55 cents, it indicates that the purchasing power of the currency has decreased, which is a reflection of inflation.
Question 3. To calculate the simple interest, we use the formula:
Interest = Principal * Rate * Time
In this case, the principal is $9.66, the rate is 10%, and the time is 8 years.
So, Interest = $9.66 * 0.10 * 8 = $7.73
Therefore, the answer is "C. $7.73."