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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?
How can we simplify the Future Value formula $P + IRT$?
How can we simplify the Future Value formula $P + IRT$?
What is the formula for calculating simple interest?
What is the formula for calculating simple interest?
What is considered the principal in a simple interest calculation?
What is considered the principal in a simple interest calculation?
How are all rates expressed in simple interest calculations?
How are all rates expressed in simple interest calculations?
What is the time duration measured in when calculating simple interest?
What is the time duration measured in when calculating simple interest?
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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