31 Questions
What is the formula for simple interest?
I = (P * R * T) / 100
If the principal amount is unknown, which formula can be used to find it?
P = I / RT
If the rate is unknown, which formula can be used to find it?
R = I / P * T
What is the total amount invested called?
Principal
What does the 'T' represent in the formula for simple interest?
Time
If a bank gives 12% simple interest and a principal amount of $5,000, what will be the interest after 2 years?
$1200
What is the formula for calculating exact interest?
I = P * r * t
In the context of ordinary interest, how many days are considered in 1 year?
360 days
What is the maturity value formula for an investment?
M = P * (1 + r)
What is the definition of compound interest?
Interest calculated on the principal amount plus previously accumulated interest
What is the ratio for computing exact interest in terms of time?
1 year : 365 days
Which formula is used to calculate the time in years for ordinary interest?
$t = \frac{P \cdot r \cdot 360}{I}$
What does 'maturity value' of an investment refer to?
The final amount of the investment after interest is added
What is the equivalent formula for maturity value when factoring out P?
$M = P \cdot (1 + r)$
What does compound interest refer to?
Interest calculated on both principal and previously accumulated interest
What are considered as two (2) ratios when expressing time in days for ordinary and exact interests?
365 days : 1 year and 360 days : 1 year
What does the ratio for computing exact interest imply in terms of time?
It implies that there are more days in a year than usual
What does the ratio for computing ordinary interest imply in terms of time?
It implies that there are exactly 360 days in a year
What is the simple interest on a principal of $8,000 at a rate of 5% for 6 years?
$2,400
If the simple interest on a certain sum of money for 3 years at 8% per annum is $720, what is the sum?
$4,500
Maggie invested $12,000 in a savings account that offered 6% simple interest. If she received $900 as interest after a certain time, how many years did she keep the money in the account?
3 years
If $2,000 amounts to $2,600 in 2 years at simple interest, what will $3,000 amount to at the same rate and in 3 years?
$4,500
A sum of money at simple interest amounts to $815 in 3 years and to $854 in 4 years. What is the principal sum?
$700
If the simple interest on a certain sum of money for 5 years at 4% per annum is $400, what will be the compound interest on the same sum of money at the same rate and for the same time?
$250
What is the equivalent formula for maturity value when factoring out $P$?
$M = P(1 + r)$
In the context of ordinary interest, how many days are considered in 1 year?
360 days
What does the 'maturity value' of an investment refer to?
The final amount after interest is added to the initial principal
What is the formula for calculating exact interest?
$I = P \times r$
If the rate is unknown, which formula can be used to find it?
$r = \frac{I}{Pt}$
What does compound interest refer to?
Interest added to the old principal to make a new principal
What is considered as two (2) ratios when expressing time in days for ordinary and exact interests?
"1 year: 365 days" and "1 year: 360 days"
This quiz covers the concept of simple interest, including the calculation of simple interest using the formula I = PRT. It also explores algebraic manipulation of the formula for finding the principal, rate, or time when one of these variables is unknown.
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