Understanding Debt
A worksheet for 7th graders to learn about different types of debt, its impact, and responsible borrowing.
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Understanding Debt
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Read each question carefully and answer to the best of your ability. This worksheet will help you understand the concept of debt, its various forms, and how it impacts individuals and the economy.
Debt is money that is owed or due. It occurs when you borrow money that you promise to pay back, usually with interest.
1. Which of the following best defines debt?
Money given as a gift
Money that is owed and must be repaid
Money saved in a bank account
Money earned from a job
2. What is usually charged on borrowed money in addition to the original amount?
A fee
A bonus
Interest
A donation
3. When you borrow money to buy a house, you are taking out a .
4. A allows you to buy now and pay later, but you must be careful with how you use it.
5. The total amount of money a government owes is called the debt.
6. All debt is bad and should be avoided at all costs.
True
False
7. Taking out a student loan to pay for college is an example of good debt.
True
False
8. Explain the difference between 'good debt' and 'bad debt' and provide an example of each.
9. What are some potential consequences of accumulating too much debt?
Use the words below to complete the sentences.
10. A is often considered good debt because it helps you invest in your future education.
11. The extra money you pay back on a loan is called .