10 Questions
What is the formula to calculate simple interest?
I = Prt
A person deposits $1000 in a savings account that earns 5% annual simple interest. How much will be the interest earned at the end of the first year?
$50
What is the difference between simple and compound interest?
Simple interest is calculated on the principal amount, while compound interest is calculated on the principal and interest.
A bank offers a 10% annual compound interest on a deposit of $5000. If the interest is compounded annually, how much will be the amount after 2 years?
$6300
What is the effect of compounding frequency on the interest earned?
More frequent compounding results in more interest earned.
If a ₱100,000 deposit earns a 5% annual simple interest, how much will be the total amount after 3 years?
₱117,500
A 2-year investment of ₱50,000 earns a 10% annual compound interest. How much will be the interest earned during the first year?
₱5,000
A bank account with a ₱20,000 principal earns a 6% annual compound interest. If the interest is compounded quarterly, what will be the total amount after 1 year?
₱22,120
A savings account has a ₱15,000 principal and earns a 7% annual simple interest. How much will be the total amount after 5 years?
₱21,500
A ₱30,000 investment earns a 9% annual compound interest. If the interest is compounded semiannually, what will be the total amount after 2 years?
₱37,872
Test your understanding of simple and compound interest with this quiz. Learn how to calculate interest rates, differences between simple and compound interest, and the effect of compounding frequency. Take this quiz to become proficient in finance and accounting concepts!
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