Gr 11 Math Lit: Ch 3.11 Interest loans and Banking

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What is the formula for calculating simple interest?

P × r

P × r × t (correct)

P × (1 + r)^t

P + (r × t)

What is the main difference between simple and compound interest?

Simple interest is only used for short-term investments

Simple interest is calculated on the principal amount, while compound interest is calculated on the principal plus any accumulated interest (correct)

Simple interest is always higher than compound interest

Compound interest is only used for long-term investments

What is the shape of a compound interest graph?

Exponential (correct)

Quadratic

Linear

Cubic

What is the total amount in a simple interest scenario?

P + (P × r × t) Signup and view all the answers

In a compound interest scenario, what happens to the principal at the end of each period?

It increases by the interest amount Signup and view all the answers

What is the formula for calculating the total amount in a compound interest scenario?

P × (1 + r)^t Signup and view all the answers

What is the formula for calculating the total amount in a simple interest calculation?

P + (P × r × t) Signup and view all the answers

In a fixed deposit account, when is the interest calculated?

At the beginning of each month Signup and view all the answers

What is the term for purchasing an item now and paying for it later through installments?

Buying on Credit Signup and view all the answers

What is the total cost of a loan or hire purchase?

The deposit plus the monthly payments plus interest Signup and view all the answers

What is the formula for calculating the fee in Structure 1 of a bank fee?

Fee = Fixed cost + (Percentage of transaction value) Signup and view all the answers

What is the shape of the graph for Structure 2 of a bank fee?

Linear graph increasing at a rate of the given percentage, becoming a horizontal line when the maximum fee is reached Signup and view all the answers

What is the formula for calculating the amount in a compound interest calculation?

P × (1 + r)^t Signup and view all the answers

In a transactional account, how is the interest calculated?

Daily based on the balance at the end of the day Signup and view all the answers

What is the difference between a loan and a hire purchase?

A loan is for buying an item, while a hire purchase is for borrowing money Signup and view all the answers

What is the formula for calculating the fee in Structure 3 of a bank fee?

Fee = (Variable fee per unit × Transaction value / Unit) Signup and view all the answers

What is the primary factor that determines the interest calculated in a simple interest scenario?

Principal amount Signup and view all the answers

What is the main characteristic of a simple interest graph?

Constant increase Signup and view all the answers

What is the key difference between simple and compound interest in terms of principal?

Simple interest is calculated on the principal only, while compound interest is calculated on the principal and interest Signup and view all the answers

What is the result of compound interest over time?

An exponential growth in interest Signup and view all the answers

What is the primary advantage of compound interest over simple interest?

Compound interest results in a greater total amount over time Signup and view all the answers

What is the relationship between the principal and interest in a compound interest scenario?

The principal increases as the interest increases Signup and view all the answers

What is the main purpose of a fixed deposit account?

To invest money for a fixed period Signup and view all the answers

What is added to the principal amount in a loan or hire purchase?

Interest Signup and view all the answers

How is the interest calculated in a transactional account?

Daily, based on the end-of-day balance Signup and view all the answers

What is the purpose of a deposit in a loan or hire purchase?

To make an initial payment Signup and view all the answers

How does the length of the loan affect the total cost?

It increases the total cost Signup and view all the answers

What is the difference between a loan and a hire purchase?

A loan is borrowed money, while a hire purchase is buying an item with interest Signup and view all the answers

What is the purpose of a maximum fee limit in bank fee Structure 2?

To prevent the fee from exceeding a certain amount Signup and view all the answers

What is the shape of the graph for bank fee Structure 1?

Linear, increasing at a fixed rate Signup and view all the answers

What is the main difference between bank fee Structures 1 and 3?

Structure 1 has a percentage of the transaction value, while Structure 3 has a fixed fee per unit Signup and view all the answers

What is the purpose of the formula for calculating the total amount in a simple interest scenario?

To calculate the total amount, including interest Signup and view all the answers

What is the main difference between a transactional account and a fixed deposit account?

The frequency of interest calculation Signup and view all the answers

Which of the following is a key characteristic of a hire purchase?

The total cost is higher than the original price due to interest Signup and view all the answers

What is the purpose of a deposit in a loan or hire purchase?

To show commitment to the agreement Signup and view all the answers

How does the length of the loan affect the total cost?

It increases the total cost Signup and view all the answers

What is the main difference between bank fee Structure 1 and Structure 2?

The presence of a maximum fee limit Signup and view all the answers

Why is compound interest more beneficial than simple interest?

It adds interest to the principal over time Signup and view all the answers

What is the primary factor that determines the interest calculated in a compound interest scenario?

The time period Signup and view all the answers

What is the result of compound interest over time?

The principal amount increases Signup and view all the answers

What is the main purpose of a fixed deposit account?

To invest money for a fixed period Signup and view all the answers

What is the relationship between the principal and interest in a compound interest scenario?

The principal is added to the interest Signup and view all the answers

What is the primary factor that determines the rate of growth in a compound interest scenario?

Interest rate per period Signup and view all the answers

How does the principal amount change in a simple interest scenario?

It remains the same throughout the period Signup and view all the answers

What is the main characteristic of a compound interest graph?

A curve showing exponential growth Signup and view all the answers

What is the result of applying simple interest to a loan or hire purchase?

The total amount paid increases at a constant rate over time Signup and view all the answers

What is the primary advantage of compound interest over simple interest?

It results in faster growth over time Signup and view all the answers

What is the key difference between simple and compound interest in terms of interest calculation?

Simple interest is calculated on the principal, while compound interest is calculated on the principal and interest Signup and view all the answers

What is the effect of the interest rate on the total amount in a simple interest scenario?

The total amount increases linearly with the interest rate. Signup and view all the answers

In a compound interest scenario, what happens to the principal amount and the interest over time?

The principal amount and interest both increase exponentially. Signup and view all the answers

What is the main difference between the graph representation of simple and compound interest?

The graph of simple interest is linear, while the graph of compound interest is exponential. Signup and view all the answers

What happens to the total amount in a compound interest scenario if the interest rate remains constant but the time period increases?

The total amount increases exponentially with the time period. Signup and view all the answers

What is the relationship between the principal and interest in a simple interest scenario?

The principal and interest are directly proportional. Signup and view all the answers

What is the effect of the time period on the total amount in a simple interest scenario?

The total amount increases linearly with the time period. Signup and view all the answers

What is the primary difference between the interest calculation in a transactional account and a fixed deposit account?

The interest is calculated based on the daily balance in a transactional account and the monthly balance in a fixed deposit account. Signup and view all the answers

What is the effect of increasing the length of the loan on the total cost?

The total cost increases as the length of the loan increases. Signup and view all the answers

What is the purpose of a deposit in a loan or hire purchase?

To provide an initial payment towards the loan or hire purchase. Signup and view all the answers

What is the main difference between bank fee Structure 1 and Structure 3?

Structure 1 has a fixed cost and a percentage of the transaction value, while Structure 3 has a variable fee per unit. Signup and view all the answers

What is the primary factor that determines the interest calculated in a simple interest scenario?

The principal amount, interest rate, and time period. Signup and view all the answers

What is the main difference between a loan and a hire purchase?

A loan is for a general purpose, while a hire purchase is for a specific item. Signup and view all the answers

What is the primary advantage of compound interest over simple interest?

Compound interest is calculated on the principal amount and interest. Signup and view all the answers

What is the main characteristic of a compound interest graph?

It is a curved graph. Signup and view all the answers

What is the result of applying simple interest to a loan or hire purchase?

The total cost increases linearly. Signup and view all the answers

What is the purpose of a maximum fee limit in bank fee Structure 2?

To cap the fee at a certain amount. Signup and view all the answers

If the interest rate is 5% per annum, and the principal is $1000, how much interest will be earned in 2 years under a simple interest scenario?

$120 Signup and view all the answers

A savings account has a principal of $5000, and an interest rate of 3% per annum. If the interest is compounded annually, what will be the total amount after 3 years?

$5819.51 Signup and view all the answers

Which of the following statements is true about the graph of a simple interest scenario?

It is a straight line showing a constant increase. Signup and view all the answers

What is the main difference between simple and compound interest in terms of the principal amount?

Simple interest is calculated on the principal, while compound interest is calculated on the principal and interest. Signup and view all the answers

If the principal is $2000, and the interest rate is 4% per annum, what will be the total amount after 5 years under a compound interest scenario?

$2549.15 Signup and view all the answers

Which of the following statements is true about the relationship between the principal and interest in a compound interest scenario?

The principal and interest grow together. Signup and view all the answers

What is the primary reason for the difference in interest calculation between a transactional account and a fixed deposit account?

The balance at the end of the day Signup and view all the answers

Which of the following is a characteristic of a loan, but not a hire purchase?

The interest rate is fixed Signup and view all the answers

What is the primary purpose of the maximum fee limit in bank fee Structure 2?

To prevent the fee from exceeding a certain amount Signup and view all the answers

What is the result of applying compound interest to a principal amount over a long period of time?

The principal amount increases exponentially Signup and view all the answers

What is the primary factor that determines the total cost of a loan or hire purchase?

The length of the loan Signup and view all the answers

What is the main difference between bank fee Structures 1 and 3?

Structure 1 is based on a fixed cost plus a percentage, while Structure 3 is based on a variable fee per unit Signup and view all the answers

What is the effect of a higher interest rate on the total amount in a simple interest scenario?

The total amount increases linearly Signup and view all the answers

What is the primary advantage of using a fixed deposit account?

The guaranteed return on investment Signup and view all the answers

What is the relationship between the principal and interest in a simple interest scenario?

The principal and interest are separate and do not affect each other Signup and view all the answers

What is the purpose of a deposit in a loan or hire purchase?

To provide a guarantee for the lender Signup and view all the answers

Gr 11 Math Lit: Ch 3.11 Interest loans and Banking

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Questions and Answers

What is the formula for calculating simple interest?

What is the main difference between simple and compound interest?

What is the shape of a compound interest graph?

What is the total amount in a simple interest scenario?

In a compound interest scenario, what happens to the principal at the end of each period?

What is the formula for calculating the total amount in a compound interest scenario?

What is the formula for calculating the total amount in a simple interest calculation?

In a fixed deposit account, when is the interest calculated?

What is the term for purchasing an item now and paying for it later through installments?

What is the total cost of a loan or hire purchase?

What is the formula for calculating the fee in Structure 1 of a bank fee?

What is the shape of the graph for Structure 2 of a bank fee?

What is the formula for calculating the amount in a compound interest calculation?

In a transactional account, how is the interest calculated?

What is the difference between a loan and a hire purchase?

What is the formula for calculating the fee in Structure 3 of a bank fee?

What is the primary factor that determines the interest calculated in a simple interest scenario?

What is the main characteristic of a simple interest graph?

What is the key difference between simple and compound interest in terms of principal?

What is the result of compound interest over time?

What is the primary advantage of compound interest over simple interest?

What is the relationship between the principal and interest in a compound interest scenario?

What is the main purpose of a fixed deposit account?

What is added to the principal amount in a loan or hire purchase?

How is the interest calculated in a transactional account?

What is the purpose of a deposit in a loan or hire purchase?

How does the length of the loan affect the total cost?

What is the difference between a loan and a hire purchase?

What is the purpose of a maximum fee limit in bank fee Structure 2?

What is the shape of the graph for bank fee Structure 1?

What is the main difference between bank fee Structures 1 and 3?

What is the purpose of the formula for calculating the total amount in a simple interest scenario?

What is the main difference between a transactional account and a fixed deposit account?

Which of the following is a key characteristic of a hire purchase?

What is the purpose of a deposit in a loan or hire purchase?

How does the length of the loan affect the total cost?

What is the main difference between bank fee Structure 1 and Structure 2?

Why is compound interest more beneficial than simple interest?

What is the primary factor that determines the interest calculated in a compound interest scenario?

What is the result of compound interest over time?

What is the main purpose of a fixed deposit account?

What is the relationship between the principal and interest in a compound interest scenario?

What is the primary factor that determines the rate of growth in a compound interest scenario?

How does the principal amount change in a simple interest scenario?

What is the main characteristic of a compound interest graph?

What is the result of applying simple interest to a loan or hire purchase?

What is the primary advantage of compound interest over simple interest?

What is the key difference between simple and compound interest in terms of interest calculation?

What is the effect of the interest rate on the total amount in a simple interest scenario?

In a compound interest scenario, what happens to the principal amount and the interest over time?

What is the main difference between the graph representation of simple and compound interest?

What happens to the total amount in a compound interest scenario if the interest rate remains constant but the time period increases?

What is the relationship between the principal and interest in a simple interest scenario?

What is the effect of the time period on the total amount in a simple interest scenario?

What is the primary difference between the interest calculation in a transactional account and a fixed deposit account?

What is the effect of increasing the length of the loan on the total cost?

What is the purpose of a deposit in a loan or hire purchase?

What is the main difference between bank fee Structure 1 and Structure 3?

What is the primary factor that determines the interest calculated in a simple interest scenario?

What is the main difference between a loan and a hire purchase?

What is the primary advantage of compound interest over simple interest?

What is the main characteristic of a compound interest graph?

What is the result of applying simple interest to a loan or hire purchase?

What is the purpose of a maximum fee limit in bank fee Structure 2?

If the interest rate is 5% per annum, and the principal is $1000, how much interest will be earned in 2 years under a simple interest scenario?

A savings account has a principal of $5000, and an interest rate of 3% per annum. If the interest is compounded annually, what will be the total amount after 3 years?

Which of the following statements is true about the graph of a simple interest scenario?

What is the main difference between simple and compound interest in terms of the principal amount?

If the principal is $2000, and the interest rate is 4% per annum, what will be the total amount after 5 years under a compound interest scenario?

Which of the following statements is true about the relationship between the principal and interest in a compound interest scenario?

What is the primary reason for the difference in interest calculation between a transactional account and a fixed deposit account?

Which of the following is a characteristic of a loan, but not a hire purchase?

What is the primary purpose of the maximum fee limit in bank fee Structure 2?

What is the result of applying compound interest to a principal amount over a long period of time?

What is the primary factor that determines the total cost of a loan or hire purchase?

What is the main difference between bank fee Structures 1 and 3?

What is the effect of a higher interest rate on the total amount in a simple interest scenario?