09MTH.07 Term 1 Review

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

• the amount of money borrowed or deposited
• the amount taxed
• the percent interest for this year
• the amount the bank owes you for being a customer at their bank

2) Jacob invested $400 into a savings account that earned simple interest at a rate of 1.25%.  He plans to keep it in the account for the next 10 years.  How much interest would he gain in the account after 10 years?

• $50
• $450       
• $500       
• $5,000

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

• the amount of money borrowed or deposited
• the amount taxed
• the percent interest for this year
• the amount the bank owes you for being a customer at their bank

To earn as much interest as possible, you should open a savings account that earns ______ interest and has the _____ interest rate.

• compound; lowest
• simple ; lowest
• compound ; highest
• simple ; highest

John just opened a savings account and wants to maximize the amount of interest he earns. Which of the following actions enable him to earn MORE interest?

• selecting an account with a higher interest rate
• leaving his money in the account for a long period of time
• transferring money into his checking account each month
• higher interest rate AND leaving money in for a longer time

Smithville Bank is offering each of it's customers a record 3.4% interest on new savings account. If Mr. Thomas opens an account with $1,500, how much interest will he earn in 3 years?

• $15,300
• $1,530
• $153
• The answer is not shown

Allen need to get a loan to replace the air-conditioning in his home. The cost of the replacement, including installation, is $4,348.0. He can apply fo a 5-year loan or a 3-year loan. Both loans involve simple interest with an annual interest rate of 6.5%. If Allen applies for the 5-year loan, how much more will he pay in interest than with the 3-year loan?

• $5,652.40

• $2,260.96

• $565.42

• $565.24

Write the percent as a decimal. 
4.3%

• 4.3
• .43
• .043
• 4300

Convert 18 months to years. 

• 18 Years
• 1.5 Years
• .18 Years
• You cannot change it to years.

If you are calculating the simple interest and you are given the time in months.  How can you find the time in years?

• divide 12 by the months
• multiply 12 times the months
• divide the months by 12
• change the months to a decimal