MUF0141- S3 Revision 1

If $720 was invested in a fixed deposit account earning 6 % p.a. for 5 years, the interest earned at the end of 5 years would be:

• $ 234.00

• $ 23 400.00

• $ 23.40

• $ 216.00

• $ 350.00

A 4-year bond paid 7.6% p.a. simple interest. If Sonja bought a bond worth $550, the interest she earned would be:

• $ 16.72

• $ 167.20

• $ 717.20

• $ 1672.00

• $ 30.40

Joanne’s accountant found that for the past 2 years she had earned a total of $420 interest in an account paying 6% simple interest. When she calculated how much she invested the amount was:

• $350

• $3500

• $50.40

• $7000

• $70.00

A loan of $1000 is taken over 5 years. The simple interest is calculated monthly. The total amount repaid for this loan is $1800. The simple interest rate per year on this loan is closest to:

• 8.9%

• 16%

• 36%

• 5%

• 11.1%

The greatest return is likely to be made if interest is compounded:

• annually

• semi-annually

• quarterly

• monthly

• fortnightly

Lillian wishes to have $24 000 in a bank account after 6 years so that she can buy a new car. The account pays interest at 15.5% p.a. compounded quarterly. The amount (to the nearest dollar) that Lillian should deposit in the account now, if she is to reach her target, is:

• $3720

• $9637

• $10 109

• $12 117

• $22 320

What will be the least number of interest periods, n, required for $6470 to grow to at least $9000 in an account with interest paid at 6.5% p.a. and compounded half-yearly?

• 10

• 11

• 12

• 20

• 22

Peter wants to borrow $8000 for a second-hand car and his bank offers him a personal loan for that amount at an interest rate of 13% p.a., interest debited fortnightly, with fortnightly repayments of $124.11 over 3 years.

The actual amount that Peter still owes after 2 years is closest to:

• $2500

• $3000

• $3500

• $4000

• $4500

Ben took out a loan for $20 000 to buy a new car. The contract required that he repay the loan over 5 years with monthly instalments of $421.02. After 2 years Ben used the annuities formula to obtain the expression in the image to calculate the amount he still owed.

• 1.008%

• 0.008%

• 0.096%

• 9.6%

• 12.096%

Which of the following would decrease the total amount of interest paid during the life of a loan? (There may be more than one answer.)

• A fall in the interest rate

• A greater amount borrowed

• A decrease in the term of the loan

• A rise in the interest rate