Financial Literacy

Jack deposited $1,400 in his bank account.  After 3 years, the account earned $294 in interest.  Find the simple interest rate.

• 5%
• 8%
• 7.25%
• 7%

Mr. Peterson paid $1,020 in interest for a loan, which was given to him at a rate of 5% for 3 years.  How much money did he borrow originally?

• $5,400
• $6,800
• $3,240
• $14,620

What is credit?

• Money allocated to a specific account for future use by the consumer without borrowing
• Goods, services, or money received in exchange for a promise to pay a definite sum of money at a future date
• The ability and willingness of an individual to pay back a loan as perceived by the lender
• An individual’s character, capital, capacity, collateral and conditions

John put 14,000 Euros in an account at a simple interest rate of 1% per year.  How much interest will he get after 12 years?

• 16,800 Euros
• 168,000 Euros
• 1,680 Euros

money earned or received

• Expenses
• Income
• Deductions
• Check

You borrowed $59,000 for 2 years at 11% which was compounded annually.  What total will you pay back?

• $13,693.90
• $1,363.90
• $72,693.90
• $73,793.90

a bankcard linked to an individual’s checking account 

• debit card
• credit card
• check card
• electronic card

You deposit $2,500 in a savings account.

What is the difference in the amount of interest that will be paid in each situation?

Option A) Interest rate of 8.25% simple interest for 2 years

Option B) Interest rate of 6.5% compounded annually for 2 years

• $769.40

• $335.56

• $76.94

• $68.52

The rate is given as a percent (%).  Before using it in the simple interest formula, you must first convert it to a______.

• fraction
• decimal
• ratio
• dollar amount

What does the "I" in the interest formula stand for?

• Principal
• Interest
• Rate
• Time