Earning Interest - Segment Test (4 Assessments)

How is interest usually expressed?

• As a single annual payment

• As a penalty

• As a percentage

• As a reward

The early Christian church forbids using interest.

• True

• False

How are government bonds obtained?

• By leasing government property

• By donating to government agencies

• By purchasing government services

• By loaning money to the government

Which of the following is the term for the amount invested?

• Installment

• Principal

• Certificate of deposit

• Money market fund

If the annual interest rate is 24 percent, what is the monthly interest rate?

• 24 percent

• 12 percent

• 6 percent

• 2 percent

When April was born, her parents placed $500 in a savings account to give to her on her 18th birthday. The interest rate on the account is one percent and it is a simple interest account. How much will April have in the account on her 18th birthday?

• $500

• $590

• $900

• $1,400

The amount earned on an investment is known as which of the following?

• Price

• Principal

• Compound

• Return

The amount earned on simple interest grows much faster than the amount earned on compound interest.

• True

• False

Where money is placed should be based on the amount of __________ an individual is willing to take and the amount of __________ they wish to receive. *(IMPORTANT: Must Capitalize the First Letter in Each Word for Your Answer)

(Example of answer format: Now; Then)

(a)  

Compound interest involves earning interest on principal and on interest previously earned.

• True

• False