Understanding Interest Calculations

What is the simple interest on a principal of $1,000 at a rate of 5% for 3 years?

• $200

• $75

• $100

• $150

Calculate the compound interest on $2,000 at an annual rate of 4% compounded annually for 2 years.

• $200.00

• $120.00

• $80.00

• 163.20

If you invest $500 at a simple interest rate of 6% for 5 years, what will be the total amount at the end?

• $650

• $600

• $550

• $700

Determine the total payment for a loan of $1,500 at a simple interest rate of 7% for 4 years.

• $1,800

• $1,920

• $1,500

• $2,100

What is the compound interest on $1,000 at a rate of 3% compounded quarterly for 1 year?

• 30.40

• 15.75

• 25.00

• 40.00

If you have a principal of $800 and earn simple interest of $120 over 4 years, what is the interest rate?

• 5%

• 3.75%

• 4%

• 2.5%

Calculate the total amount after 3 years if $1,200 is invested at a compound interest rate of 5% compounded annually.

• 1300.50

• 1200.00

• 1500.00

• 1389.15

What is the difference between simple interest and compound interest?

• Simple interest is always higher than compound interest.

• Simple interest is calculated on the principal only; compound interest is calculated on the principal plus accumulated interest.

• Simple interest can be compounded over time.

• Compound interest is calculated only on the principal amount.

If you borrow $2,500 at a simple interest rate of 8% for 2 years, how much interest will you pay?

• $800

• $400

• $200

• $600

Calculate the total payment for a principal of $3,000 at a compound interest rate of 6% compounded semi-annually for 3 years.

• 3582.16

• 3400.75

• 3600.50

• 3500.00