Finance Stations Quiz

What is the correct definition of interest?

• money that is borrowed from the bank

• money paid to you by the bank

• money that you deposit into your account

• transactions that have not yet been cleared

Semi-Annually means how many times a year?

• 2

• 4

• 12

• 52

Monthly means how many times a year?

• 2

• 4

• 12

• 52

When calculating interest, how do you write the percent?

• as a fraction

• as a decimal

• as a whole number

• as a negative number

Convert 6.75% to a decimal.

• 0.6750

• 0.00675

• 0.675

• 0.0675

The simple interest formula is I=Prt. The P represents the principal. The principal is ___________________.

• the amount of money the bank gives you

• the same as the interest rate

• the amount of money you deposit plus interest

• only the amount of money you deposit

Destiny borrowed $4,000 for 5 years at 6% simple interest rate. How much interest will Destiny earn?

• $120,000

• $12,000

• $1,200

• $120

Given an investment of $1,500:

Which investment would have a larger balance after 3 years?

• 4% Simple Interest

• 4% Compounded Monthly

• 4% Compounded Daily

• 4% Compounded Weekly

What does the n stand for in this compound interest formula?

• number of years

• number representing interest rate

• number of times interest is calculated per year

• number of deposits made

Ethan deposited $5,000 in a savings account that pays 4% interest compounded weekly. Which equation could be used to find the value of the account after 3 years?

• B = 5,000(1 + 4)³

• B = 5,000(1 + (0.04/12))^(12*3)

• B = 5,000(1 + (0.04/52))³

• B = 5,000(1 + (0.04/52))^(52*3)