We Will Compound Your Interest with this Quiz

You invest $100 at 10% interest for one year in a simple interest account. You also invest $100 for one year in a compound interest account. At the end of one year, what is true?

• You have more money in the simple interest account

• You have more money in the compound interest account

• You have the same amount of money in both accounts

• None of the above are true

In the simple interest formula, I=PRT, the PRT stands for:

• Principle, Rules, Total

• Principal, Rate, Time

• Principle, Rate, Time

• Public, Regulated, Together

Complete the Compound Interest Formula: A=PV (1+?)^t

• ? = R (rate)

• ? = FV (future value)

• ? = I (interest)

• ? = p(principal)

In an economy with high price inflation, a dollar today will be worth __________ a dollar tomorrow.

• more than

• less than

• the same as

You are investing $1,250 for 10 years in a simple interest account which has a 7.5% interest rate. How much interest will you earn? (formula: I=PRT)

• $1,250

• $937,50

• $750

• $1,011.66

You are investing $1,250 for 10 years in a compound interest account which compounds annually at 7.5%. How much will your investment be worth at the end of 10 years? (formula: A=PV(1+R)^T

• $1,326.29

• $2,197.66

• $1,675.09

• $2,576.29

How much more interest will you earn if you invest $1000 in a compound interest account at 5% for 10 years compared to a $1000 investment at 5% in a simple interest account for 10 years?

• $500

• $628.89

• $128.89

• $312.88

You have $33,000 to invest in a simple interest account for 30 months at 9.6% interest. What will the value of your investment be at the end of 30 months?

• $7,920

• $40,920

• $48,985

• $33,009

You need to pay off a debt of $12,500 in 5 years. You will invest $8,000 for 5 years in a compound interest account that has a 7% interest rate that compounds annually. Will you be able to pay off your debt?

• Yes

• No

You need to raise 50,000 by the end of 2025. You will invest 40,000 on January 1, 2021 and withdraw it on December 31, 2025. Your simple interest rate is 3.5%. Will you have at lest $50,000 by the end of 2025?

• Yes

• No