TopicName Test - Australia’s Best NBN Provider
Test Yourself Chapter 1 Simple and compound interest
Name: ___________________________
All Multiple Choice
| |The yearly interest payable on a deposit of $250 at 5.5% |B |
| |p.a. simple interest is: | |
| |$137.50 | |
| |$13.75 | |
| |$12.50 | |
| |$125.00 | |
| |$17.35 | |
| | | |
| |The interest on $12 167 invested for 5 years at 2.5% simple|C |
| |interest p.a. would be nearest to: | |
| |$1220.87 | |
| |$1521 | |
| |$1520.88 | |
| |$152.10 | |
| |$152.09 | |
| | | |
| |Sarah received $75 interest on her term deposit of $450 |B |
| |over 3 years. The simple interest rate per annum was: | |
| |56% | |
| |5.6% | |
| |22% | |
| |0.55% | |
| |11.2% | |
| | | |
| |Tom earned $504 when he invested $16 820 for 8 months. His |D |
| |rate of simple interest was: | |
| |0.37% p.a. | |
| |2.00% p.a. | |
| |3.00% p.a. | |
| |4.49% p.a. | |
| |5.00% p.a. | |
| | | |
| |John invested a sum of money, which earned $750 simple |B |
| |interest at the rate of 6% per annum over 2 years. The | |
| |amount invested was: | |
| |$88.80 | |
| |$6250 | |
| |$3125 | |
| |$2125 | |
| |None of these. | |
| | | |
| |Cathy invested $8200 at the rate of 4.5% p.a. It earned |C |
| |$738 simple interest. The period of investment was: | |
| |6 months | |
| |1 year | |
| |2 years | |
| |2 years 6 months | |
| |3 years | |
| | | |
| |A 500-g packet of chocolate costs $2.50. Assuming inflation|B |
| |averages 2.8% per annum over each of the next 3 years, how | |
| |much will the chocolate cost in three years? | |
| |$2.64 | |
| |$2.72 | |
| |$2.79 | |
| |$2.87 | |
| |$2.95 | |
| | | |
| |An investment of $10 000 at the rate of 8% per annum, |E |
| |compounded quarterly, will reach $14 800 in close to: | |
| |1 year | |
| |2 years | |
| |3 years | |
| |4 years | |
| |5 years | |
| | | |
| |An investment of $10 000 to be invested for a period of 5 |C |
| |years and compounded quarterly at 3.75% p.a. will have a | |
| |future value closest to which of the following: | |
| |$10 480 | |
| |$12 020 | |
| |$12 050 | |
| |$20 900 | |
| |None of the above. | |
| | | |
| |Tom has the choice of investing his money in compound |E |
| |interest with rests as indicated below. Which situation | |
| |would return him the most interest? | |
| |yearly rests | |
| |six-monthly rests | |
| |quarterly rests | |
| |monthly rests | |
| |daily rests | |
| | | |
| |Use the following information to answer questions 11–13. | |
| | | |
| |An amount of $12 000 is invested for a period of 9 months | |
| |at 3% p.a. compounded monthly. The compound interest | |
| |formula to calculate the future value of an investment over| |
| |a period of time is: | |
| |[pic] | |
| |The value of T in the formula would be: |A |
| |[pic] | |
| |1 | |
| |3 | |
| |9 | |
| |12 | |
| | | |
| |The value of n in the formula would be: |E |
| |[pic] | |
| |1 | |
| |3 | |
| |9 | |
| |12 | |
| |The value of A at the end of the time period would be |C |
| |closest to: | |
| |$12 030 | |
| |$12 070 | |
| |$12 273 | |
| |$15 657 | |
| |$15 714 | |
| | | |
| |The growth of an investment over a period of time is shown |A |
| |as a graph which depicts a straight line. Which of the | |
| |following investments would depict a straight line? | |
| |6% p.a. simple interest | |
| |6% p.a. compounding yearly | |
| |6% p.a. compounding quarterly | |
| |6% p.a. compounding monthly | |
| |6% p.a. compounding daily | |
| | | |
| |How long would it take for $5000 invested at 5% p.a. |D |
| |compound interest with yearly rests to double in value? | |
| |5 years | |
| |7 years | |
| |10 years | |
| |14 years | |
| |20 years | |
| | | |
| |An interest rate of 4.5% p.a. compounding monthly is |D |
| |equivalent to an effective interest rate of: | |
| |4.50% p.a. | |
| |4.55% p.a. | |
| |4.57% p.a. | |
| |4.59% p.a. | |
| |4.60% p.a. | |
| | | |
| |Which of the following compounding rates is equivalent to |B |
| |an effective interest rate of 2.75% p.a.? | |
| |2.7% p.a. compounding | |
| |six-monthly | |
| |2.75% p.a. compounding yearly | |
| |2.6% p.a. compounding quarterly | |
| |2.6% p.a. compounding monthly | |
| |2.6% p.a. compounding daily | |
| | | |
| |Two banks pay simple interest on |B |
| |short-term deposits. Bank A pays 5% p.a. over 3 years, and | |
| |Bank B pays 5.5% p.a. for 2[pic] years. The difference | |
| |between the two banks’ final payout figure, if $10 000 was | |
| |invested in each account is: | |
| |$0 | |
| |$125 | |
| |$250 | |
| |$1375 | |
| |$1500 | |
| | | |
| |Paul wishes to invest $10 000 for a period of 5 years. |B |
| |Which of the following investments would be best for him? | |
| |6.7% p.a. simple interest | |
| |6.75% p.a. compound interest with yearly rests | |
| |6.5% p.a. compound interest with quarterly rests | |
| |6.25% p.a. compound interest with monthly rests | |
| |6% compound interest with daily rests. | |
| | | |
| |An investment of $6000 was placed for 3 years at 4.25% p.a.|B |
| |compounded annually. How much more would be collected if | |
| |the investment was compounded quarterly? | |
| |No more | |
| |$13.36 | |
| |$32.97 | |
| |$46.33 | |
| |$52.29 | |
| | | |
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