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Calculating Simple Interest Quiz

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Questions and Answers

What is the annual interest rate charged by the bank for Ravi's loan?

16%
12%
10%
14% (correct)

How many months is Ravi's loan for?

8 months (correct)
10 months
12 months
6 months

What is the principal amount of Ravi's loan?

$5000
$6800 (correct)
$7200
$7500

What formula should be used to calculate simple interest?

<p>Interest = Principal x Rate x Time (B)</p> Signup and view all the answers

What amount will Ravi owe after 8 months if no payments are made?

<p>$7267.33 (A)</p> Signup and view all the answers

Flashcards

Interest

The extra amount you have to pay back on top of the original loan amount due to borrowing the money.

Repayment Amount

The total amount that needs to be repaid, including the original loan amount and the interest.

Interest Rate

The percentage rate at which interest is charged on a loan, typically expressed as an annual percentage.

Principal

The amount of money borrowed or lent.

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Loan Term

The period of time for which a loan is taken out.