Financial Math Quiz

1. Work out the total amount in your bank if £250 is invested and earns simple interest of 2% for 2 years.

£260

£300

£290

If £250 is invested at a simple interest rate of 2% for 2 years, the interest earned would be £5 (250 * 0.02 * 2). Adding this interest to the initial investment, the total amount in the bank would be £255. Therefore, the correct answer is £260.

Explanation

If £250 is invested at a simple interest rate of 2% for 2 years, the interest earned would be £5 (250 * 0.02 * 2). Adding this interest to the initial investment, the total amount in the bank would be £255. Therefore, the correct answer is £260.

2. A sum fetched a total simple interest of R4016.25 at a rate of 9% p.a in 5 years.what is the sum?

R8925

R9500

The sum can be calculated using the formula for simple interest: I = P * R * T, where I is the interest, P is the principal sum, R is the rate, and T is the time. In this case, we are given that the interest is R4016.25, the rate is 9% per annum, and the time is 5 years. Plugging these values into the formula, we can solve for the principal sum. The correct answer is R8925.

Explanation

The sum can be calculated using the formula for simple interest: I = P * R * T, where I is the interest, P is the principal sum, R is the rate, and T is the time. In this case, we are given that the interest is R4016.25, the rate is 9% per annum, and the time is 5 years. Plugging these values into the formula, we can solve for the principal sum. The correct answer is R8925.

3. Sean earns £6.83 per hour parking cars at an airport. If he works for 38 hours per week, how much is his weekly gross pay?

£190.25

£315.12

£255.45

Sean earns £6.83 per hour and works for 38 hours per week. To calculate his weekly gross pay, we can multiply his hourly rate by the number of hours he works. £6.83 x 38 = £259.34. Therefore, the correct answer is £255.45.

Explanation

Sean earns £6.83 per hour and works for 38 hours per week. To calculate his weekly gross pay, we can multiply his hourly rate by the number of hours he works. £6.83 x 38 = £259.34. Therefore, the correct answer is £255.45.

4. How much time will it take for an amount of Rs. 900 to yield Rs. 81 as interest at 4.5% per annum of simple interest?

4 years

2 years

At a 4.5% interest rate per annum, the interest earned is calculated as a percentage of the principal amount. To find the time it takes for an amount of Rs. 900 to yield Rs. 81 in interest, we can use the formula: Time = (Interest / (Principal * Rate)). Plugging in the given values, we get Time = (81 / (900 * 0.045)) = 2 years. Therefore, it will take 2 years for an amount of Rs. 900 to yield Rs. 81 as interest at a 4.5% per annum simple interest rate.

Explanation

At a 4.5% interest rate per annum, the interest earned is calculated as a percentage of the principal amount. To find the time it takes for an amount of Rs. 900 to yield Rs. 81 in interest, we can use the formula: Time = (Interest / (Principal * Rate)). Plugging in the given values, we get Time = (81 / (900 * 0.045)) = 2 years. Therefore, it will take 2 years for an amount of Rs. 900 to yield Rs. 81 as interest at a 4.5% per annum simple interest rate.

5. Which of these is NOT a deduction from your pay each month?

Direct Debit

Tax

National Insurance

Direct Debit is a payment method that allows companies to take money directly from a person's bank account to pay for goods or services. It is not a deduction from your pay each month, as it is a separate transaction that you authorize. Tax and National Insurance, on the other hand, are deductions that are typically taken from an individual's salary or wages each month.

Explanation

Direct Debit is a payment method that allows companies to take money directly from a person's bank account to pay for goods or services. It is not a deduction from your pay each month, as it is a separate transaction that you authorize. Tax and National Insurance, on the other hand, are deductions that are typically taken from an individual's salary or wages each month.

6. Compound interest is calculated only on the principal amount.

True

False

Compound interest is calculated on both the principal amount and any accumulated interest from previous periods. This means that the interest earned in each period is added to the principal, and the next period's interest is calculated on the new, larger principal amount. This compounding effect leads to exponential growth over time, making compound interest a powerful tool for long-term investments.

Explanation

Compound interest is calculated on both the principal amount and any accumulated interest from previous periods. This means that the interest earned in each period is added to the principal, and the next period's interest is calculated on the new, larger principal amount. This compounding effect leads to exponential growth over time, making compound interest a powerful tool for long-term investments.

7. Mr Zwane invested an amount of R13.900 divided in two different schemes A and B at the simple interest rate of 14% p.a and 11% p.a respectively. If the total amount of simple interest earned in 2 years be R3508,what was the amount invested in scheme B ?

R6400

R8000

Let the amount invested in scheme A be x, then the amount invested in scheme B would be (13900 - x).

Using the formula for simple interest, we can calculate the interest earned from scheme A as (x * 14% * 2) and the interest earned from scheme B as ((13900 - x) * 11% * 2).

Given that the total interest earned is R3508, we can set up the equation:

(x * 14% * 2) + ((13900 - x) * 11% * 2) = 3508

Simplifying this equation, we find that x = 6400.

Therefore, the amount invested in scheme B is R6400.

Explanation

Let the amount invested in scheme A be x, then the amount invested in scheme B would be (13900 - x).

Using the formula for simple interest, we can calculate the interest earned from scheme A as (x * 14% * 2) and the interest earned from scheme B as ((13900 - x) * 11% * 2).

Given that the total interest earned is R3508, we can set up the equation:

(x * 14% * 2) + ((13900 - x) * 11% * 2) = 3508

Simplifying this equation, we find that x = 6400.

Therefore, the amount invested in scheme B is R6400.

8. Arun took a loan of Rs. 1400 with simple interest for as many years as the rate of interest. If he paid Rs.686 as interest at the end of the loan period, what was the rate of interest?

7%

4%

Arun took a loan of Rs. 1400 with simple interest for as many years as the rate of interest. This means that the rate of interest is equal to the number of years. Arun paid Rs. 686 as interest at the end of the loan period. To find the rate of interest, we can use the formula: Interest = Principal * Rate * Time. Plugging in the values, we have 686 = 1400 * Rate * Rate. Solving for Rate, we get Rate = 7%.

Explanation

Arun took a loan of Rs. 1400 with simple interest for as many years as the rate of interest. This means that the rate of interest is equal to the number of years. Arun paid Rs. 686 as interest at the end of the loan period. To find the rate of interest, we can use the formula: Interest = Principal * Rate * Time. Plugging in the values, we have 686 = 1400 * Rate * Rate. Solving for Rate, we get Rate = 7%.

9. Charlie earns £1,980 per month as a consumer reviewer. She pays income tax at a rate of 20%. How much tax does Charlie pay per month?

£1584

£396

£1122

Charlie earns £1,980 per month and pays income tax at a rate of 20%. To calculate how much tax Charlie pays per month, we multiply her monthly income by the tax rate. 20% of £1,980 is £396. Therefore, Charlie pays £396 in tax per month.

Explanation

Charlie earns £1,980 per month and pays income tax at a rate of 20%. To calculate how much tax Charlie pays per month, we multiply her monthly income by the tax rate. 20% of £1,980 is £396. Therefore, Charlie pays £396 in tax per month.

10. Mr. Thomas invested an amount of Rs. 13,900 divided in two different schemes A and B at the simple interest rate of 14% p.a. and 11% p.a. respectively. If the total amount of simple interest earned in 2 years be Rs. 3508, what was the amount invested in Scheme B?

R7200

R6400

Let the amount invested in scheme A be x and the amount invested in scheme B be (13900 - x). The simple interest earned from scheme A in 2 years is (x * 14 * 2) / 100 = 28x/100. The simple interest earned from scheme B in 2 years is ((13900 - x) * 11 * 2) / 100 = (27800 - 22x)/100. Given that the total simple interest earned is 3508, we can set up the equation: 28x/100 + (27800 - 22x)/100 = 3508. Simplifying the equation, we get: 6x/100 = 3508 - 27800/100. Solving for x, we find x = 7200. Therefore, the amount invested in scheme B is 13900 - 7200 = 6700. Hence, the correct answer is R7200.

Explanation

Let the amount invested in scheme A be x and the amount invested in scheme B be (13900 - x). The simple interest earned from scheme A in 2 years is (x * 14 * 2) / 100 = 28x/100. The simple interest earned from scheme B in 2 years is ((13900 - x) * 11 * 2) / 100 = (27800 - 22x)/100. Given that the total simple interest earned is 3508, we can set up the equation: 28x/100 + (27800 - 22x)/100 = 3508. Simplifying the equation, we get: 6x/100 = 3508 - 27800/100. Solving for x, we find x = 7200. Therefore, the amount invested in scheme B is 13900 - 7200 = 6700. Hence, the correct answer is R7200.