When an Account Pays One Rate of Interest on a Minimum

question 28

Multiple Choice

When an account pays one rate of interest on a minimum amount on deposit and a higher rate of interest on additional deposits,this is called ____ interest.

• A)compound
• B)variable
• C)tiered
• D)none of these

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Definitions:

Co-makers

Individuals or entities that jointly sign a loan or credit agreement, sharing equal liability for the repayment of the debt.

Cosureties

Two or more parties who jointly agree to guarantee the debt or obligation of another, sharing the liability.

Conditional Guarantor

A party that agrees to fulfill the obligations of a debtor, but only under specific conditions outlined in an agreement.

Premium

The amount paid for an insurance policy or the cost above the nominal value of something.