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This document contains 12 multiple choice questions testing understanding of simple and compound interest concepts: 1) The questions cover calculation of simple interest given principal, rate, and time as well as identification of variables in the interest formula. 2) Key concepts addressed include the difference between simple and compound interest, how to maximize interest earned by selecting accounts with higher rates and longer times, and conversion between time periods. 3) The document assesses comprehension of interest formulas and calculations as well as interpretation of rate, principal, time and their meanings in financial applications.

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Princess Salvador
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543 views

Quiz

This document contains 12 multiple choice questions testing understanding of simple and compound interest concepts: 1) The questions cover calculation of simple interest given principal, rate, and time as well as identification of variables in the interest formula. 2) Key concepts addressed include the difference between simple and compound interest, how to maximize interest earned by selecting accounts with higher rates and longer times, and conversion between time periods. 3) The document assesses comprehension of interest formulas and calculations as well as interpretation of rate, principal, time and their meanings in financial applications.

Uploaded by

Princess Salvador
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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1.

Find the simple interest: 186597

Principal: $6,000

Interest Rate: 5%

Time: 6 months

a. $150 b.$1,800

b. $1,500 d. $15,000

2. What does P stand for in I = Prt ?

a. percent b. partner

c. percent change d.principal

3. What is the formula for simple interest?

a. A=P(1+r)t b. I=Prt

c. I=P(1+r)t c. A=Prt

4. If you are calculating the simple interest and you are given the time in months. How can you find the
time in years?

a. divide 12 by the months b.multiply 12 times the months

c. divide the months by 12 c. change the months to a decimal

5. John just opened a savings account and wants to maximize the amount of interest he earns. Which of
the following actions enable him to earn MORE interest?

a. selecting an account with a higher interest rate

b. leaving his money in the account for a long period of time

c. transferring money into his checking account each month

d. higher interest rate AND leaving money in for a longer time

6. To earn as much interest as possible, you should open a savings account that earns ______ interest
and has the _____ interest rate.

a. compound; lowest b. simple ; lowest

c. compound ; highest d. simple ; highest

7. I = Prt where r represents the rate. Rates must be converted into ____ before multiplying.

a. fractions b. mixed numbers

c. decimals d. integers

8. Smithville Bank is offering each of it's customers a record 3.4% interest on new savings account. If Mr.
Thomas opens an account with $1,500, how much interest will he earn in 3 years?

a. $15,300 b. $1,530

c. $153 d. The answer is not shown

9. Ann puts $300 in a bank account earning 4% interest. How much will she earn in interest in 1 year?

a. 4 b.8
c.12 c. 16

10. Find the compound interest:

Principal: $1735

Interest Rate: 0.8%

Time: 1 year

a.$1,388 b. $138.80

c.$13.88 d. None of the answers are correct.

11. The simple interest formula is I=Prt. The P represents the principle. The principle is
___________________.

a. the amount of money borrowed or deposited

b. the amount taxed

c. the percent interest for this year

d. the amount the bank owes you for being a customer at their bank

12. What is important about how time is calculated in I= Prt ?

a. it must be in months b. it must be in years

c. it is not calculated d. it must be in weeks

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