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Questions and Answers
What is the price paid for the use of a sum of money over a period of time called?
What is the price paid for the use of a sum of money over a period of time called?
- Interest (correct)
- Rent
- Savings
- Principal
Who pays interest to a lending agent for the use of the agent’s fund over the term of the loan?
Who pays interest to a lending agent for the use of the agent’s fund over the term of the loan?
- Individuals
- Banks
- Depositors
- Borrowers (correct)
What specifies the rate at which interest accumulates per year throughout the term of the loan?
What specifies the rate at which interest accumulates per year throughout the term of the loan?
- Future Value
- Savings
- Principal
- Interest Rate (correct)
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?
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?
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What is the formula for calculating simple interest?
What is the formula for calculating simple interest?
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When is simple interest generally used?
When is simple interest generally used?
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What is the future value of simple interest (A) equal to?
What is the future value of simple interest (A) equal to?
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How can you solve for the unknown variable if any three of the four variables in the simple interest formula are given?
How can you solve for the unknown variable if any three of the four variables in the simple interest formula are given?
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