Week 3 Starter

What formula do you use to calculate the amount of interest earned in a simple interest situation?

• $A=P\left(1+i\right)^n$

• $I=Pin$

• $i=\frac{I}{Pn}$

• $I=\frac{i}{Pn}$

How do I calculate the interest rate in a simple interest situation?

• $i=\frac{I}{Pn}$

• $i=\frac{I}{P}$

• $I=Pin$

• $P=\frac{I}{in}$

Express 6.59% as a decimal.

• 0.659

• 6.59

• 0.0659

• 0.00659

Express 0.189 as a percentage.

• 189%

• 0.189%

• 1.89%

• 18.9%

Determine the value of n:

15% p.a. compounding quarterly for 5 years

• 20

• 4

• 5

• 15

Determine the value of i:

7.9% p.a. compounding weekly for 2 years

• $0.079$

• $\frac{0.079}{104}$

• $\frac{7.9}{104}$

• $\frac{0.079}{100\times104}$

Which of the following formulas is not correct?

• $P=\frac{A}{\left(1+i\right)^n}$

• $\frac{A}{P}=\left(1+i\right)^n$

• $i=\frac{P}{In}$

• $i=^n\sqrt{\frac{A}{P}}-1$

Johnathan has two investment options. Which should he choose?

• 10% p.a. for 5 years

• 10% p.a. compounding monthly for 5 years

Elizabeth is purchasing a home. Which mortgage should she choose?

• 5% p.a. compounding weekly for 30 years.

• 5% p.a. compounding monthly for 30 years.

• 5% p.a. compounding annually for 30 years.

• 5% p.a. compounding bi-annually for 30 yeras.