Gr 10 Math Lit: Ch 4.4 Interest
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Questions and Answers

What is the formula to calculate the interest rate as a percentage of the original amount?

  • (Interest Amount × 100) / Original Amount
  • Original Amount / Interest Amount
  • (Interest Amount / Original Amount) × 100 (correct)
  • Interest Amount - Original Amount

    • Who pays the VAT to the government?

  • The producer
  • The service provider (correct)
  • The government
  • The consumer

    • What is a VAT-exclusive price?

  • A price that includes VAT
  • A price that has no VAT rate
  • A price that excludes VAT (correct)
  • A price that is exempt from VAT

    • What is the VAT rate in this country?

    <p>14%</p> Signup and view all the answers

    What happens to VAT-exempt items?

    <p>No VAT is added to the price</p> Signup and view all the answers

    How do you calculate the VAT-inclusive price?

    <p>Price + VAT Amount</p> Signup and view all the answers

    What is the purpose of interest in a financial transaction?

    <p>To compensate the lender for the use of their money</p> Signup and view all the answers

    What is the definition of an interest rate?

    <p>A percentage charged for borrowing money over a given period of time</p> Signup and view all the answers

    What factor affects the interest rate a person is charged?

    <p>Their credit rating and employment history</p> Signup and view all the answers

    How do you calculate the total amount owed when borrowing money?

    <p>Principal Amount + Interest Amount</p> Signup and view all the answers

    What is the formula to calculate the interest amount?

    <p>Interest Amount = Principal Amount × Interest Rate</p> Signup and view all the answers

    Why do banks offer different interest rates to different customers?

    <p>Because of different factors, such as credit ratings and employment history</p> Signup and view all the answers

    What is the purpose of the South African Reserve Bank's lending rate?

    <p>To influence the interest rates offered by financial institutions</p> Signup and view all the answers

    What is the first step to find the interest rate when you are given the final amount and the original amount?

    <p>Find the difference between the final amount and the original amount</p> Signup and view all the answers

    What is the purpose of VAT?

    <p>To collect tax at every stage of producing and selling goods</p> Signup and view all the answers

    Which of the following items is exempt from VAT?

    <p>All of the above</p> Signup and view all the answers

    What will be the VAT amount if the VAT-exclusive price is R100 and the VAT rate is 14%?

    <p>R14</p> Signup and view all the answers

    What is the VAT-inclusive price if the VAT-exclusive price is R100 and the VAT rate is 14%?

    <p>R114</p> Signup and view all the answers

    What is the effect on the final consumer when VAT is charged at every stage of producing and selling goods?

    <p>The final consumer pays more VAT</p> Signup and view all the answers

    Why can a person deduct the VAT they paid if they use the goods to make an income?

    <p>Because they use the goods to make an income</p> Signup and view all the answers

    What is the main purpose of charging interest when borrowing money?

    <p>To earn revenue for the lender</p> Signup and view all the answers

    What happens when you buy an item on hire purchase?

    <p>You are borrowing money to pay for the item</p> Signup and view all the answers

    What is the interest rate dependent on?

    <p>Several factors, including the South African Reserve Bank's lending rate</p> Signup and view all the answers

    What is the result of saving money in a bank account?

    <p>You earn interest on the balance</p> Signup and view all the answers

    What is calculated as a percentage of the amount owing?

    <p>The interest amount</p> Signup and view all the answers

    What do you need to know to calculate the interest amount?

    <p>The interest rate and the principal amount</p> Signup and view all the answers

    What is the formula to calculate the total amount?

    <p>Total Amount = Principal Amount + Interest Amount</p> Signup and view all the answers

    Why do different banks offer different interest rates?

    <p>Because they offer different deals based on various conditions</p> Signup and view all the answers

    What determines the interest rate charged by a bank to a customer?

    <p>All of the above</p> Signup and view all the answers

    What is the result of saving money in a bank account?

    <p>You earn interest on the balance in your account</p> Signup and view all the answers

    What is the formula to calculate the interest amount?

    <p>Interest Amount = Principal Amount × Interest Rate</p> Signup and view all the answers

    What is the purpose of the interest rate?

    <p>To charge a fee for borrowing money</p> Signup and view all the answers

    What is the difference between the interest rate and the interest amount?

    <p>The interest rate is the percentage, while the interest amount is the actual value</p> Signup and view all the answers

    What happens when you buy an item on hire purchase?

    <p>You borrow money from the shop to pay for the item in monthly instalments</p> Signup and view all the answers

    What is the total amount owed when borrowing money?

    <p>The principal amount plus the interest amount</p> Signup and view all the answers

    What is the effect of interest on the borrower?

    <p>It increases the amount borrowed</p> Signup and view all the answers

    What is the primary reason why the final consumer pays the VAT?

    <p>Because the final consumer is the end user of the product and cannot claim a VAT refund.</p> Signup and view all the answers

    Which of the following statements is true about VAT exempt items?

    <p>They do not have VAT added to their price.</p> Signup and view all the answers

    What is the purpose of calculating the interest rate as a percentage of the original amount?

    <p>To compare the interest rates of different lenders.</p> Signup and view all the answers

    What happens when VAT is charged at every stage of producing and selling goods?

    <p>The final consumer pays the VAT.</p> Signup and view all the answers

    What is the result of adding the VAT amount to the VAT-exclusive price?

    <p>The VAT-inclusive price is calculated.</p> Signup and view all the answers

    Who can deduct the VAT they paid if they use the goods to make an income?

    <p>The person who uses the goods to make an income.</p> Signup and view all the answers

    What happens when you borrow money from a bank or purchase an item on hire purchase?

    <p>You are charged interest on the borrowed amount</p> Signup and view all the answers

    What is the interest rate dependent on?

    <p>The South African Reserve Bank's lending rate, credit ratings, employment history, and ownership of assets</p> Signup and view all the answers

    What is the formula to calculate the total amount owed when borrowing money?

    <p>Total Amount = Principal Amount + Interest Amount</p> Signup and view all the answers

    What is the result of saving money in a bank account?

    <p>You earn interest on the saved amount</p> Signup and view all the answers

    What is the first step to find the interest rate when you are given the final amount and the original amount?

    <p>Find the difference between the final amount and the original amount</p> Signup and view all the answers

    What is calculated as a percentage of the amount owing?

    <p>Interest amount</p> Signup and view all the answers

    Why do banks offer different interest rates to different customers?

    <p>Based on several factors, including credit ratings, employment history, and ownership of assets</p> Signup and view all the answers

    What is the purpose of the interest rate in a financial transaction?

    <p>To compensate the lender for the risk of lending</p> Signup and view all the answers

    What is the purpose of calculating the interest rate as a percentage of the original amount?

    <p>To compare the interest rates of different banks</p> Signup and view all the answers

    What is the effect of VAT on the final consumer when it is charged at every stage of producing and selling goods?

    <p>The final consumer pays more VAT</p> Signup and view all the answers

    What is the result of adding the VAT amount to the VAT-exclusive price?

    <p>The VAT-inclusive price is obtained</p> Signup and view all the answers

    What is the difference between a VAT-inclusive price and a VAT-exclusive price?

    <p>The VAT-inclusive price includes VAT, while the VAT-exclusive price excludes VAT</p> Signup and view all the answers

    Why can a person deduct the VAT they paid if they use the goods to make an income?

    <p>Because they can claim it back as an input tax</p> Signup and view all the answers

    Which of the following items is not exempt from VAT?

    <p>Furniture</p> Signup and view all the answers

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