Q1. Research the following current interest rates. These rates are available on the Internet and at a local bank or credit union.
The current rates banks/credit unions are offering/asking are
a. _________ for a traditional savings account.
b. _________ for a one-year certificate of deposit (CD).
c. _________ for a 30-year fixed-rate mortgage with no points.
d. _________ for a standard credit card.
Please note the source of your information: (financial institution, newspaper, website, etc.)
____________________________________
Q2. The current prime-lending rate is _________, which is the interest rate charged by banks to their most credit-worthy customers (usually the most prominent and stable business customers).
Please note the source of your information: (financial institution, newspaper, website, etc.)
________________________
Q3. Explain why the reported interest rates differ between (a) and (b) above.
Q4. Explain why the reported interest rates differ between (b) and (c) above.
Q5. Explain why the reported interest rates differ between (c) and (d) above.
Q6. Explain the prime lending rate and its importance with regard to other lending rates.