Finances test

Simple interest is paid on the principal value while compound interest is paid on an accumulating value.

• True

• False

Simple interest is an example of linear growth while compound interest is an example of exponential growth.

• True

• False

More frequent compounding results in less interest.

• True

• False

The bigger the principal, the bigger the accumulated interest.

• True

• False

There is zero risk when you invest your money in a GIC.

• True

• False

There is zero risk when you invest your money in a mutual fund.

• True

• False

A savings account has a lower interest rate than a chequing account.

• True

• False

Paying the minimum amount on your credit card each month is a good strategy for paying off your balance in full.

• True

• False

Pay Day loan stores have a higher interest rate than credit cards.

• True

• False

The grace period given by credit card companies is generally 21 days.

• True

• False