Finance Quiz
- What is the formula for calculating simple interest?
- What is the formula for calculating compound interest?
- What is the term for the amount of money borrowed or invested, also known as the principal?
- What is the term for the rate at which interest is charged or earned?
- What is the term for the length of time for which interest is calculated?
- A sum of $5,000 is invested at a rate of 6% per annum for 2 years. What is the simple interest earned?
- A sum of $10,000 is invested at a rate of 8% per annum compounded annually for 3 years. What is the compound interest earned?
- Which type of interest pays interest on both the principal and any accumulated interest?
- A sum of $2,500 is invested at a rate of 4% per annum compounded quarterly for 2 years. What is the compound interest earned?
- Which type of interest is calculated only on the principal amount?
- A sum of $1,000 is invested at a rate of 5% per annum compounded semi-annually for 3 years. What is the compound interest earned?
- A sum of $8,000 is invested at a rate of 10% per annum compounded annually for 5 years. What is the compound interest earned?
- What is the term for the frequency with which interest is compounded?
- A sum of $12,000 is invested at a rate of 9% per annum compounded annually for 4 years. What is the total amount of money in the account at the end of 4 years?
- A sum of $6,000 is invested at a rate of 3.5% per annum compounded quarterly for 1 year. What is the total amount of money in the account at the end of 1 year?
P × r × t
P × r × n
P × (1 + r)t
P × (1 + r)t
P × r × t
P × r × n
Rate
Interest
Principal
Interest
Rate
Time
Time
Rate
Interest
$500
$400
$600
$2,208
$2,944
$1,800
Compound interest
Simple interest
Annual interest
$220.20
$214.32
$208.50
Compound interest
Simple interest
Annual interest
$162.89
$166.38
$160.38
$4,804.00
$4,613.36
$4,451.52
Time
Rate
Compounding period
$17,220
$19,440
$18,360
$6,250.00
$6,262.39
$6,236.74