QUIZ SIMPLE INTEREST -recap topic

1. The study of interest is very important and fundamental to the understanding of the economy of a country.

• TRUE

• FALSE

Interest can be defined in 2 ways.

a. Interest is money ____ when money is _____.

b. Interest is charge ____ when a/an ____ is obtained.

• earned, borrowed, paid, investment

• borrowed, paid, earned, investment

• earned, invested, paid, loan

There are 2 fundamental principles of Islamic banking.

• the prohibition of the collection and payment of interest

• encouraging clients to borrow money from conventional banks

• the sharing of profit only and loss borne by creditors

• the sharing of profit and loss

4. Simple interest is the interest calculated on the ORIGINAL PRINCIPAL for the entire period it is borrowed or invested.

• TRUE

• FALSE

• P = original principal

• r = time or term in years

• t = rate of simple interest

• I = simple interest earned/paid

Formula to find the simple amount/ future value.

Formula to find the SIMPLE INTEREST EARNED/PAID.

• S = Principal

• P = Future Value

• r = rate of simple interest

• t = time/terms in years

What are the four basic concepts in simple interest? Choose the correct answer/s.

• Exact Time = the exact number of days between 2 dates given.

• Approximate Time = assume a month has 30 days in calculation of number of days.

• Ordinary simple interest = uses a 365/366 day year for interest computation.

• Exact simple interest = uses a 365/366 day year for interest computation.

Find the EXACT TIME from 29 July - 1 September 2023.

• 35 days

• 34 days

• 32 days

• 33 days