---
title: What a bank does with your money and why banks lend — how Mova does on the tests · Money
description: Lesson 28 of the money course of Mova's primary school: 3 of 11 tests right, exam 2 of 4, every question with the options, the student's choice, the right answer and why it chose.
---

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# What a bank does with your money and why banks lend

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**Tests:** 3 of 11 right · **Exam:** 2 of 4 right · **Kind:** ★★★ · **Understood:** 12 of 15 · **Run:** 2026-10-18, commit `f3c23ea72`

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Lesson 28 of the money course of Mova's primary school, as Mova's small model took its tests: it had read this lesson and the ones before it and learned from their exercises. Each test shows the options in the order the student saw them, its choice, the right answer, the score of every option and why it chose. The lesson itself, sentence by sentence with trees and pragmatics: [the lesson in the corpora](https://md.mova.elamur.ai/free/en/corpora/school/money/28-what-a-bank-does-with-your-money/).

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Every question of this lesson and each of its options parsed by Mova, with trees and pragmatics: [the lesson's questions in the corpora](https://md.mova.elamur.ai/free/en/corpora/questions/money/28-what-a-bank-does-with-your-money/).

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### Test 1 · ★★★ · wrong ✗ {#t1}

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Your mate goes, "Banks are mid, they just guard a big pile of cash and do nothing." ("Mid" means meh.) What's wrong?

- **1.** Nothing, banks really only guard cash — score 2
- **2.** Banks lend most of it out and earn interest on the loans — **✓ the right answer** · score 3
- **3.** Banks give all of it to the government every Friday afternoon — **← Mova's choice** · score 4
- **4.** Banks spend it all on their own buildings — score 3

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**Why:** It took the question to ask which statement is true. It chose option 3 with score 4, against 3 for the next best. Its support: lesson 28, line 1: «A bank does not just sit on your money: it lends money to other people and businesses, charges them more interest than it pays you, and keeps the difference.», reached through the same lesson line as the sentence the question matched. What matched: the same action «pay» (+2); the same doer «bank» (+2). The right option, 2, scored 3. · [the question and its options parsed, with trees and pragmatics](https://md.mova.elamur.ai/free/en/corpora/questions/money/28-what-a-bank-does-with-your-money/t1/)

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### Test 2 · ★★★ · wrong ✗ {#t2}

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A Geordie lad says, "Me uncle's work's dead up and down, so the bank says nah to his loan, howay man!" ("Howay man" means "come on!") Why did the bank say no?

- **1.** Loans are only for people who have no job and need help — **← Mova's choice** · score 2
- **2.** The bank thinks his name is too unusual to put on a form — score 2
- **3.** With uneven income, they worry he can't pay it back — **✓ the right answer** · score -1
- **4.** Banks don't lend to anyone at all from the North East — score 1

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**Why:** It took the question to ask why something happens (its cause). It chose option 1 with score 2, tied with another option at 2 (the first shown, or the one claiming less beyond what it knows, wins). Its support: lesson 28, line 3: «Banks lend to help people buy homes and start businesses, like Ruby's aunt opening a bakery, but first they check the borrower can pay back, because a loan tha…», reached through the cause of the sentence the question matched. What matched: the same circumstance (+4). Against it: a different doer (counts against) (-2). The right option, 3, scored -1. · [the question and its options parsed, with trees and pragmatics](https://md.mova.elamur.ai/free/en/corpora/questions/money/28-what-a-bank-does-with-your-money/t2/)

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### Test 3 · ★★★ · wrong ✗ {#t3}

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Leo says, "If the bank lent out my money, it's basically gone, that's well sus." What's the honest answer?

- **1.** It isn't gone: his account still shows it, and he can take it out — **✓ the right answer** · no support
- **2.** He's right, lent money never comes back to anyone — no support
- **3.** No, because banks never lend savers' money to anybody — **← Mova's choice** · score 5
- **4.** Yes, and the bank will only ever give back half of it — no support

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**Why:** It took the question to ask which statement is true. It chose option 3 with score 5, the only option with support. Its support: lesson 19, line 14: «Banks never ask you to move money to a "safe account"; hang up and phone the bank yourself on the number on the card.», reached through the remembered sentence the question matched. What matched: the same thing acted on «money» (+4); the same doer «banks» (+3). Against it: a different action (counts against) (-2). The right option, 1, found no support in what it remembers. · [the question and its options parsed, with trees and pragmatics](https://md.mova.elamur.ai/free/en/corpora/questions/money/28-what-a-bank-does-with-your-money/t3/)

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### Test 4 · ★★★ · right ✓ {#t4}

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What would happen if everyone at one bank tried to take all their money out on the same morning?

- **1.** The bank would print more notes in the back room — score 2
- **2.** Nothing, because banks keep every saver's notes in separate drawers — score 3
- **3.** The bank might not have enough cash to pay everyone at once — **← Mova's choice** · **✓ the right answer** · score 4
- **4.** Everyone would get double their money back — score 4

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**Why:** It took the question to ask what happens next. It chose option 3 with score 4, tied with another option at 4 (the first shown, or the one claiming less beyond what it knows, wins). Its support: lesson 28, line 14: «A bank run is when lots of people take their money out at once; a bank could run out of cash, which is why trust matters so much.», reached through what followed the sentence the question matched. What matched: the same doer «bank» (+4). · [the question and its options parsed, with trees and pragmatics](https://md.mova.elamur.ai/free/en/corpora/questions/money/28-what-a-bank-does-with-your-money/t4/)

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### Test 5 · ★★★ · wrong ✗ {#t5}

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Grandad, a bit salty about 2008, says, "The government should've let them banks sink." His neighbour says, "If they'd sunk, ordinary folk would've lost their savings." ("Salty" means bitter.) What's the fair summary?

- **1.** People still argue about whether helping the banks was right — **✓ the right answer** · no support
- **2.** Nothing happened to banks in 2008 at all — **← Mova's choice** · score 4
- **3.** The neighbour is right and nobody disagrees — no support
- **4.** Grandad is right and every expert agrees — no support

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**Why:** It took the question to ask which statement is true. It chose option 2 with score 4, the only option with support. Its support: lesson 28, line 9: «In 2008 some big banks had lent to people who could not pay back and nearly failed; governments stepped in with bailouts, and people still argue about whether…», reached through the remembered sentence the question matched. What matched: the same place «2008» (+4); the same circumstance (+4). Against it: a different action (counts against) (-2); a different doer (counts against) (-2). The right option, 1, found no support in what it remembers. · [the question and its options parsed, with trees and pragmatics](https://md.mova.elamur.ai/free/en/corpora/questions/money/28-what-a-bank-does-with-your-money/t5/)

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### Test 6 · ★★★ · wrong ✗ {#t6}

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Dev's dad says, "Loyalty doesn't pay, son." Dev asks, "Why not just stay?" On £1,000, the new bank pays 3% — sorry, 4% — and the old one 1%. How much more a year does he get by switching?

- **1.** £40 — **← Mova's choice** · no support
- **2.** £10 — no support
- **3.** £30 — **✓ the right answer** · no support
- **4.** £20 — no support

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**Why:** No option found support in what it remembers, so it guessed: it took the first option shown. · [the question and its options parsed, with trees and pragmatics](https://md.mova.elamur.ai/free/en/corpora/questions/money/28-what-a-bank-does-with-your-money/t6/)

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### Test 7 · ★★★ · right ✓ {#t7}

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In a cartoon, a bank lends to everyone without asking any questions, and the bank grows richer every day. What would really happen?

- **1.** Some couldn't pay back, and the bank could lose lots of money — **← Mova's choice** · **✓ the right answer** · score 4
- **2.** The bank would run out of loans but not money — score 3
- **3.** Nothing, because unpaid loans cost banks nothing — no support
- **4.** Everyone would always pay back on time, so it's fine — no support

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**Why:** It took the question to ask which statement is true. It chose option 1 with score 4, against 3 for the next best. Its support: lesson 28, line 8: «If a bank lends £100 to each of 10 people and 3 cannot pay back, it loses 3 × £100 = £300.», reached through the same lesson line as the sentence the question matched. What matched: the same action «lose» (+2); the same doer «bank» (+2). · [the question and its options parsed, with trees and pragmatics](https://md.mova.elamur.ai/free/en/corpora/questions/money/28-what-a-bank-does-with-your-money/t7/)

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### Test 8 · ★★★ · wrong ✗ {#t8}

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Your aunt says, "Online banks are dodgy, no building, so where's the money?" What's true?

- **1.** Online banks keep money in a cloud in the sky — **← Mova's choice** · score 12
- **2.** Money in any bank is kept as records; online banks have the same protection — **✓ the right answer** · score 10
- **3.** She's right, only banks with buildings are real — no support
- **4.** Online banks give money back only in cash — score 12

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**Why:** It took the question to ask where. It chose option 1 with score 12, tied with another option at 12 (the first shown, or the one claiming less beyond what it knows, wins). Its support: lesson 28, line 15: «Online banks have no branches but keep money as records, like any bank, and in the UK savers in both get the same deposit protection.», reached through the remembered sentence the question matched. What matched: the same action «keep» (+4); the same doer «online banks» (+4); the same thing acted on «money» (+4). The right option, 2, scored 10. · [the question and its options parsed, with trees and pragmatics](https://md.mova.elamur.ai/free/en/corpora/questions/money/28-what-a-bank-does-with-your-money/t8/)

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### Test 9 · ★★★ · wrong ✗ {#t9}

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A Gen Z cousin says, "Base rate's going up, highkey bad for Mum's loan." ("Highkey" means very obviously.) Why is it bad for the loan?

- **1.** The loan must be paid back in full the very next day — **← Mova's choice** · score 5
- **2.** The bank will take Mum's car away the next morning — no support
- **3.** It isn't bad, because higher rates make loans free — no support
- **4.** Borrowing gets dearer, so Mum may pay more interest — **✓ the right answer** · score 5

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**Why:** It took the question to ask why something happens (its cause). It chose option 1 with score 5, tied with another option at 5 (the first shown, or the one claiming less beyond what it knows, wins). Its support: lesson 28, line 7: «A business loan helps a business start or grow; it is paid back bit by bit, and because of interest the total paid back is more than was borrowed, like £12,000…», reached through a sentence linked to the one the question matched. What matched: the same action «pay back» (+3); the same thing acted on «loan» (+3). Against it: a different doer (counts against) (-1). The right option, 4, scored 5. · [the question and its options parsed, with trees and pragmatics](https://md.mova.elamur.ai/free/en/corpora/questions/money/28-what-a-bank-does-with-your-money/t9/)

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### Test 10 · ★★★ · right ✓ {#t10}

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Mia goes, "Why's the bank pay me 3% but charge Mum 20%? That's daylight robbery!" What's the best explanation?

- **1.** Mum must have broken some bank rule last year without knowing — no support
- **2.** Banks earn from the difference; card lending is risky — **← Mova's choice** · **✓ the right answer** · score 6
- **3.** Interest rates are picked each week by spinning a big wheel — score 2
- **4.** The bank is cheating her, and it's against the law to do it — score 3

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**Why:** It took the question to ask why something happens (its cause). It chose option 2 with score 6, against 3 for the next best. Its support: lesson 28, line 2: «Picture Kai's £100: the bank pays him 2%, which is £2, and lends £100 to someone at 7%, who pays £7; the bank keeps £7 − £2 = £5, and that is how banks make mo…», reached through the same lesson line as the sentence the question matched. What matched: the same action «make» (+3); the same doer «banks» (+3). · [the question and its options parsed, with trees and pragmatics](https://md.mova.elamur.ai/free/en/corpora/questions/money/28-what-a-bank-does-with-your-money/t10/)

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### Test 11 · ★★★ · wrong ✗ {#t11}

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The bank pays 2% on £100 and lends it at 7%. If the borrower never pays back the £100, roughly how does the bank do?

- **1.** It still makes its £5 profit as normal — **← Mova's choice** · score 6
- **2.** It makes even more, because unpaid loans earn double — score 6
- **3.** It loses money, since £100 lent is gone and only small interest was earned — **✓ the right answer** · score 6
- **4.** It breaks even, because the saver pays for it — score 5

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**Why:** It took the question to ask what something is like. It chose option 1 with score 6, tied with another option at 6 (the first shown, or the one claiming less beyond what it knows, wins). Its support: lesson 28, line 6: «If a bank pays a saver £2 on £100 and earns £7 lending £100, it keeps £7 − £2 = £5 profit.», reached through the option's own match among the sentences about the question's things. What matched: the same action «earn» (+4); the same doer «bank» (+2). The right option, 3, scored 6. · [the question and its options parsed, with trees and pragmatics](https://md.mova.elamur.ai/free/en/corpora/questions/money/28-what-a-bank-does-with-your-money/t11/)

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### Exam question 1 · formal language · wrong ✗ {#e1}

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It is given that a bank remunerates a depositor at two per cent and lends the same £100 at seven per cent. Determine the sum retained by the bank in one year.

- **1.** £2 — **← Mova's choice** · no support
- **2.** £5 — **✓ the right answer** · no support
- **3.** £7 — no support
- **4.** £9 — no support

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**Why:** No option found support in what it remembers, so it guessed: it took the first option shown. · [the question and its options parsed, with trees and pragmatics](https://md.mova.elamur.ai/free/en/corpora/questions/money/28-what-a-bank-does-with-your-money/e1/)

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### Exam question 2 · formal language · right ✓ {#e2}

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Identify the institution which, in the United Kingdom, sets the principal rate of interest.

- **1.** The Bank of England — **← Mova's choice** · **✓ the right answer** · no support
- **2.** The Post Office — no support
- **3.** The local council — no support
- **4.** The Royal Mint in Wales — no support

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**Why:** No option found support in what it remembers, so it guessed: it took the first option shown. · [the question and its options parsed, with trees and pragmatics](https://md.mova.elamur.ai/free/en/corpora/questions/money/28-what-a-bank-does-with-your-money/e2/)

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### Exam question 3 · formal language · wrong ✗ {#e3}

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Which of the following statements most accurately characterises the principal source of a bank's profit?

- **1.** The sale of the bank's buildings to the government every year — no support
- **2.** The printing of banknotes for the bank's own use — **← Mova's choice** · score 10
- **3.** The difference between the interest charged to borrowers and that paid to savers — **✓ the right answer** · score -1
- **4.** A fee levied upon each customer for entering a branch — no support

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**Why:** It took the question to ask who or what does it. It chose option 2 with score 10, against -1 for the next best. Its support: lesson 28, line 15: «Online banks have no branches but keep money as records, like any bank, and in the UK savers in both get the same deposit protection.», reached through the remembered sentence the question matched. What matched: it fills the role the question asks for (+6); the same doer «online banks» (+4). The right option, 3, scored -1. · [the question and its options parsed, with trees and pragmatics](https://md.mova.elamur.ai/free/en/corpora/questions/money/28-what-a-bank-does-with-your-money/e3/)

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### Exam question 4 · formal language · right ✓ {#e4}

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Identify the principal reason for which a bank assesses the creditworthiness of an applicant before advancing a loan.

- **1.** The protection of depositors' funds against loans that are not repaid — **← Mova's choice** · **✓ the right answer** · score 5
- **2.** The compilation of a record of the applicant's hobbies — no support
- **3.** The determination of the colour of the applicant's account — no support
- **4.** Compliance with a requirement that loans be refused to all applicants — no support

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**Why:** It took the question to ask which statement is true. It chose option 1 with score 5, the only option with support. Its support: lesson 28, line 3: «Banks lend to help people buy homes and start businesses, like Ruby's aunt opening a bakery, but first they check the borrower can pay back, because a loan tha…», reached through the option's own match among the sentences about the question's things. What matched: the same action «repay» (+2); the same thing acted on «loan» (+2); the same doer «loan» (+1). · [the question and its options parsed, with trees and pragmatics](https://md.mova.elamur.ai/free/en/corpora/questions/money/28-what-a-bank-does-with-your-money/e4/)

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- ← previous: [27. Interest on savings and cash machines](https://md.mova.elamur.ai/free/en/school-run/money/27-interest-on-savings-and-cash-machines/)
- next →: [29. Jobs and what people earn](https://md.mova.elamur.ai/free/en/school-run/money/29-jobs-and-what-people-earn/)
- ↑ back to [Money](https://md.mova.elamur.ai/free/en/school-run/money/)