General Mathematics 11 Exam

What is the formula for simple interest?

• I=Prt

• A=P(1+r)t

• A=P+I

• I=A−P

The compound interest formula A=P(1+r)t shows that:

• Interest is calculated only on the principal

• Interest is calculated on previous interest

• Time has no effect on the final amount

• Rate is always constant

What makes compound interest typically earn more than simple interest?

• Lower initial investment

• Shorter time periods

• Interest earned on interest

• Fixed interest rates

In compound interest calculations, what does the term 'compounding frequency' refer to?

• The total time of investment

• How often interest is calculated

• The initial principal amount

• The interest rate percentage

Which statement about simple interest is FALSE?

• It's easier to calculate than compound interest

• Interest is earned on previous interest

• It's calculated only on the principal

• It's often used for short-term loans

An investment of 50,000.00 earns in simple interest over 22 years. What is the interest rate?

• 4%

• 8%

• 2%

• 6%

Compound interest compounded quarterly means:

• Interest is calculated once per year

• Interest is calculated four times per year

• Interest is calculated monthly

• Interest is calculated daily

Which investment would earn more money over 10 years?

• at 5% simple interest

• at 4.8% compound interest

• at 4.9% simple interest

• at 5.5% compound interest

In the formula A=P(1+r)t, what does r represent?

• Return on investment

• Rate of interest as a decimal

• Regular payment amount

• Remaining balance

How many times will money double at 7% simple interest?

• Never

• Once every 14.3 years

• Infinitely

• Once every 10 years