Calculation Of Simple Interest Quiz

10 Questions | Total Attempts: 178

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Calculation Of Simple Interest Quiz

Simple interest is the part of math and the formula is A = P(1 + rt). Take this quiz and solve all these questions related to simple interest


Questions and Answers
  • 1. 
    Banks offer the interest as an "incentive" to customers who open accounts. What does "incentive" mean?
    • A. 

      Encouragement

    • B. 

      Punishment

    • C. 

      Trick

    • D. 

      None of the above

  • 2. 
    Which of these in an opinion about interest?
    • A. 

      Most American banks offer interest rates below 10 percent

    • B. 

      Interest can be compounded yearly, monthly, or even daily

    • C. 

      An interest rate of 20 percent ,compounded monthly, is too high

    • D. 

      None of the above

  • 3. 
    How can you compare simple and compound interest?
    • A. 

      Simple interest is paid on the principal plus accurate interest; simple interest is paid only on the principal

    • B. 

      Compound interest is paid on the principal plus accurate interest

    • C. 

      Compound interest is paid out once a month; simple interest is paid only on the principal

    • D. 

      None of the above

  • 4. 
    Which of the following statements is true?
    • A. 

      The more money you have in the bank, the less interest you accumulate

    • B. 

      The more money you have in the bank, the less interest you pay

    • C. 

      The more money you have in the blank, the more interest you accumulate

    • D. 

      None of the above

  • 5. 
    How does charging interest encourage banks to make loans?
    • A. 

      It allows them to make profits by lending money

    • B. 

      It ensures that borrowers will pay them back

    • C. 

      It discourages people from borrowing money from their friends

    • D. 

      None of the above

  • 6. 
    Which of the following is true?
    • A. 

      You pay interest when you borrow money and earn interest when you loan money

    • B. 

      You earn interest when you borrow money and pay interest when you loan money

    • C. 

      You pay interest both when you borrow and loan money

    • D. 

      None of the above

  • 7. 
    If your bank offers 6 percent annual simple interest, and you start with $60 in your account, how much will you have after one year?
    • A. 

      $70.00

    • B. 

      $66.30

    • C. 

      $63.60

    • D. 

      $80.00

  • 8. 
    If your bank offers 6 percent monthly simple interest , and you start with $60 in your account, how much will you have after one year?
    • A. 

      $103.20

    • B. 

      $63.60

    • C. 

      $120.00

    • D. 

      $64.60

  • 9. 
    What can you infer about compound interest from the information presented in the movie?
    • A. 

      It's not worth calculating unless you make a large initial deposit

    • B. 

      Very few banks offer it

    • C. 

      It allows people with savings accounts to accumulate more money than they would with simple interest

    • D. 

      None of the above

  • 10. 
    How might life be different if banks didn't offer interest on savings accounts, or charge interest on loans?
    • A. 

      People would open fewer bank accounts, and banks would offer fewer loans

    • B. 

      People would open more bank accounts, and banks would offer more loans

    • C. 

      People would open fewer bank accounts, but banks would offer more loans

    • D. 

      None of the above

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