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Financial Literacy Quiz: Nominal Effective Interest

Authored by Jeff Da Moude

Mathematics

9th - 12th Grade

Used 1+ times

Financial Literacy Quiz: Nominal Effective Interest
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6 questions

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1.

DRAG AND DROP QUESTION

30 sec • 1 pt

The effective annual interest rate for a loan with a nominal rate of 8% compounded monthly is (a)   .

8.00%
8.30%
8.50%
8.75%

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What does the term 'compounding interest' refer to?

Interest rate stated without the effect of compounding

Interest rate that remains constant over time

Interest rate with compounding taken into account

Interest added periodically into the original account

3.

DRAG AND DROP QUESTION

30 sec • 1 pt

The value of a $10,000 school loan at 8% interest compounded monthly after 4 years will be (a)   .

$12,000
$13,000
$13,756.66
$13,500

4.

DRAG AND DROP QUESTION

30 sec • 1 pt

The effective rate for a savings account if the nominal rate is 4.5% compounded daily is (a)   .

4.70%
4.60%
4.50%
4.80%

5.

DRAG AND DROP QUESTION

30 sec • 1 pt

The nominal rate for a credit card account if the effective rate is 19.5618% compounded monthly is (a)   .

21%
18%
20%
19%

6.

DRAG AND DROP QUESTION

30 sec • 1 pt

Use the TVM SOLVER to answer the following. The monthly payment amount for a $32,035 convertible with a 60-month period compounded monthly is ​ (a)   .

$630.00
$620.00
$600.00
$636

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