Gr 10 Math Ch 8: Calculations using Simple and Compound Interest

What does the principal amount in a hire purchase agreement represent?

The price of the product minus the deposit (correct)

The total interest paid over the duration of the loan

The total cost of the product including interest

The deposit plus any monthly payments

How is the interest calculated in a hire purchase agreement?

At a compound interest rate on the total amount

Based on the total monthly payments made

On the entire cash price of the product

At a simple interest rate on the remaining loan amount (correct)

Which formula is used to calculate future prices under inflation?

$A = P + (P imes i)$

$A = P(1 + i)^n$ (correct)

$A = P(1 + r)^n$

$A = P imes (1 + n imes i)$

What is the purpose of using the compound interest formula for population growth?

To account for the non-linear increase in population size Signup and view all the answers

What is the variable 'n' in the inflation and population growth formulas?

The number of years for which the calculations are made Signup and view all the answers

In the context of hire purchase agreements, which aspect does not directly influence the monthly payment amount?

The customer's total income Signup and view all the answers

What type of interest is charged in a hire purchase agreement?

Simple interest Signup and view all the answers

In the formula for calculating future price due to inflation, what does the variable 'i' represent?

Inflation rate as a decimal Signup and view all the answers

Which of the following best describes the principal amount in a hire purchase agreement?

The cash price minus the deposit made Signup and view all the answers

What is the primary reason for using the compound interest formula in population growth calculations?

To reflect the exponential nature of growth Signup and view all the answers

If the inflation rate is 3% per year, what is the value of 'i' when used in the compound interest formula?

0.03 Signup and view all the answers

When calculating monthly payments in a hire purchase agreement, which of the following factors is NOT considered?

Total cash price including taxes Signup and view all the answers

What financial characteristic is essential to understand when entering into a hire purchase agreement?

The calculation of interest on the remaining amount Signup and view all the answers

Which of the following best describes how inflation affects the price of goods and services?

It raises prices exponentially over time. Signup and view all the answers

In the context of loan repayment through hire purchase, which factor contributes directly to the monthly payment amount?

The simple interest rate applied to the remaining amount Signup and view all the answers

Considering population growth calculations, what does the variable 'A' represent in the compound interest formula?

Future population anticipated after growth Signup and view all the answers

What does the variable 'P' signify in the inflation formula?

Current price before inflation adjustment Signup and view all the answers

Which of the following statements is true regarding the relationship between interest rates and hire purchase agreements?

Interest is applied only to the remaining loan amount after deposit. Signup and view all the answers