Quiz on Calculating Interest

What is the formula to calculate simple interest?

• I = P * T

• I = R * T

• I = P * R * T

• I = P * R

If the principal amount is $5000, the interest rate is 5% and the time period is 3 years, what is the simple interest?

• 750

• 250

• 100

• 500

What is the formula to calculate compound interest?

• A = P(1 + r/n)^(nt)

• A = P(1 + r)^t

• A = P(1 + r/n)^(nt) - P

• A = P(1 - r/n)^(nt) - P

If the principal amount is $2000, the interest rate is 8% and the time period is 2 years, what is the compound interest?

• $332.8

• $800

• $600

• $400

What is the difference between simple interest and compound interest?

• Simple interest is only applicable to loans while compound interest is applicable to both loans and investments

• Compound interest takes into account the accumulated interest while simple interest does not.

• Simple interest is calculated annually while compound interest is calculated monthly

• Simple interest is always higher than compound interest

If the principal amount is $3000, the interest rate is 6% and the time period is 4 years, what is the total amount after compound interest?

• $4000.00

• $3500.00

• $3593.74

• $3200.00

What is the formula to calculate the rate of interest?

• Rate of Interest = (Principal / Interest) * 100

• Rate of Interest = Principal * Interest

• Rate of Interest = (Interest / Principal) * 100

• Rate of Interest = Principal + Interest

If the simple interest is $400, the principal amount is $5000 and the time period is 2 years, what is the rate of interest?

• 4%

• 2%

• 8%

• 6%

What is the formula to calculate the time period?

• T = f

• T = 1/T

• T = f^2

• T = 1/f

If the compound interest is $600, the principal amount is $8000 and the interest rate is 4%, what is the time period?

• 1 year

• 2 years

• 0

• 3 years