Interest Skills Quiz

What is the simple interest on a loan of $200 at a rate of 5% per year for 3 years?

• $10

• $15

• $30

• $45

If you invest $500 at a simple interest rate of 4% per year, how much interest will you earn in 2 years?

• $20

• $40

• $60

• $80

What is the principal amount if you earn $150 in simple interest at a rate of 10% per year?

• $150

• $15

• $500

• $1500

Which of the following formulas represents the calculation of simple interest?

If you deposit $1000 in a savings account with a compound interest rate of 5% per year, how much will the account be worth after 2 years, compounded annually?

• $1025

• $1050

• $1102.50

• $1105

What is the difference between simple and compound interest?

• Simple interest is calculated on the principal amount only, while compound interest is calculated on the principal amount plus any interest earned.

• Simple interest rates are always higher than compound interest rates.

• Compound interest is calculated only once at the end of the term, while simple interest is calculated annually.

• There is no difference; they are the same.

A sum of $800 is invested at a simple interest rate of 3% per year. How much interest will it earn in 4 years?

• $24

• $48

• $96

• $120

If $1500 is invested at a compound interest rate of 4% per year, compounded annually, how much will the investment be worth after 3 years?

• $1584

• $1680

• $1696.64

• $1700

How much total amount will be repaid on a loan of $1000 at a simple interest rate of 6% per year after 2 years?

• $1060

• $1120

• $1200

• $1120

For a principal amount of $750 invested at a simple interest rate of 4% per year, what will be the interest earned after 5 years?

• $100

• $120

• $150

• $200