1. Why do banks charge interest to borrowers ? 2. What prevents any one bank from charging outrageously high interest rates for loans ? 3. Explain how a well -functioning financial system promotes long -run economic growth . Part 2 - Putting it Together - For each individual , suggest one financial asset from the list provided appropriate for his /her circumstance and explain your reasoning checking account /cash savings account real estate bitcoin certificates of deposit bonds stocks (equities ) 4 . Luke has $700 that he doesn't need to spend at the moment . However , when he has $1,500 he would like to buy a car . He's planning to have all the money within the next six months 5 . Han is 25 years old and has $10,000 and his goal is to double the value of his money . He isn't worried if his money declines in value in the short term . 6. Rey has $5,000 that she can save . She would like her money to increase in value but she's very risk averse . She won't need access to this money for at least two years 7. Lando has $10,000 . He earns income by buying cars , fixing them up and selling them , so he needs access to his money because he always needs to be ready to buy a car when he finds a deal 8. Leia received a $250,000 inheritance from her uncle . She wants an asset that will continue to generate passive income for her for several decades but she is worried that there is a bubble in the stock market 9 . Steve is 66 years old and has been retired for two years . He has saved well for retirement and is now happy to accept lower returns in favor of more security at this point in his life