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Double
Trouble
When I was eight, I wanted a toy and
needed $10 to buy it. But, as usual, I was broken. I decided to ask my
11-year-old sister, Kathleen, for a loan. I went to her room, 1 her
for the cash. Laughing, she agreed to 2 me the money, but added, "I will charge
you 10 percent compound interest every 3 until
you pay me back."
"Compound interest---what's
that?" I asked.
"Well, interest is what you call
the 4 money
borrowers have to pay back on a loan," she explained. "Compound
interest means that the interest payments get bigger and bigger the
5 you take to pay back the loan. To repay
the loan, you will need to give me $11 after one month. If you wait two months
to pay me back, your 6 will grow from $10 to $11. So I'll be charging
you interest on $11. Then I will add that interest to the $11 you already owe
me, for a 7 of
$12.10. That's what you'll owe after two months."
"Sure. I get it," I said.
Though truthfully, I was getting 8.
Kathleen lent me the money, and I
bought the toy. My birthday came a month later, and my mom gave me $10. 9,
that was just the amount I needed to buy another toy I wanted 10. I put off paying my sister for a
month. After another month, I 11 about
the loan.
Several months later, on Christmas
morning, my sister and I each found a $02 bill in our stockings. I was just
putting it into my pocket 12 Kathleen
tapped me on the shoulder.
"Sorry, kiddo. That's mine. I'm 13 on
your debt."
"Huh?" Then I remembered the
loan. "Hey! How can it be that much? I 14 borrowed $10."
"True," she said, "but
interest has been compounding for eight months. Now you 15 me
$21.43." She paused, then added. "You can pay me the $1.43."
I 16 to
believe that a $10 loan could more than double so quickly. Much to my 17, my sister got her pencil and tablet
and showed me exactly how it all added up.
My head 18 as
I tried to keep track of Kathleen's 19, but this time, I got the basic idea
of compound interest. I 20 the
hard way that borrowing money can be "double trouble" in no time.
(1)
A .
blaming
B .
begging
C .
searching
D .
preparing
(2)
A .
pay
B .
send
C .
lend
D .
hand
(3)
A .
month
B .
year
C .
week
D .
day
(4)
A .
little
B .
same
C .
enough
D .
extra
(5)
A .
shorter
B .
longer
C .
more
D .
less
(6)
A .
cash
B .
saving
C .
note
D .
debt
(7)
A .
total
B .
cost
C .
number
D .
bill
(8)
A .
encouraged
B .
shocked
C .
confused
D .
satisfied
(9)
A .
Gradually
B .
Obviously
C .
Unfortunately
D .
Hopefully
(10)
A .
seriously
B .
anxiously
C .
secretly
D .
desperately
(11)
A .
forgot
B .
knew
C .
talked
D .
cared
(12)
A .
after
B .
until
C .
while
D .
when
(13)
A .
carrying
B .
collecting
C .
relying
D .
focusing
(14)
A .
normally
B .
nearly
C .
only
D .
really
(15)
A .
owe
B .
offer
C .
take
D .
give
(16)
A .
decided
B .
refused
C .
pretended
D .
managed
(17)
A .
relief
B .
delight
C .
annoyance
D .
regret
(18)
A .
turned
B .
nodded
C .
stuck
D .
hurt
(19)
A .
calculations
B .
excuses
C .
directions
D .
discoveries
(20)
A .
explored
B .
learned
C .
explained
D .
questioned