8 Questions
What is the price paid for the use of a sum of money over a period of time called?
Interest
Who pays interest to a lending agent for the use of the agent’s fund over the term of the loan?
Borrowers
What specifies the rate at which interest accumulates per year throughout the term of the loan?
Interest Rate
If interest is paid only on the initial amount of money invested or borrowed, and not on subsequently accrued interest, it is called what type of interest?
Simple interest
What is the formula for calculating simple interest?
I = Prt
When is simple interest generally used?
On short-term loans or investments less than one year
What is the future value of simple interest (A) equal to?
(Prt) + P
How can you solve for the unknown variable if any three of the four variables in the simple interest formula are given?
You cannot solve for the unknown variable
Test your knowledge about interest, borrowing, and lending with this quiz. Explore the concept of interest as the price paid for the use of money over time, and how it applies to borrowing and saving money.
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