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Questions and Answers
What is the total amount that needs to be paid back in a Future Value calculation?
What is the total amount that needs to be paid back in a Future Value calculation?
- Original amount borrowed
- Maturity value (correct)
- Interest value
- Principal value
If a loan is borrowed at 16% for 3 months, which part of the Future Value formula represents the 16% rate?
If a loan is borrowed at 16% for 3 months, which part of the Future Value formula represents the 16% rate?
- R (correct)
- I
- T
- P
In the context of simple interest, what is the Future Value formula equivalent to?
In the context of simple interest, what is the Future Value formula equivalent to?
- $P + I$
- $PT + I$
- $P(1 + RT)$
- $P + RT$ (correct)
What does the maturity value represent in a loan scenario?
What does the maturity value represent in a loan scenario?
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How can we simplify the Future Value formula $P + IRT$?
How can we simplify the Future Value formula $P + IRT$?
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What is the formula for calculating simple interest?
What is the formula for calculating simple interest?
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What is considered the principal in a simple interest calculation?
What is considered the principal in a simple interest calculation?
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How are all rates expressed in simple interest calculations?
How are all rates expressed in simple interest calculations?
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What is the time duration measured in when calculating simple interest?
What is the time duration measured in when calculating simple interest?
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Which factor is NOT included in the formula for simple interest calculation?
Which factor is NOT included in the formula for simple interest calculation?
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