Review

It is the interest computed on the principal and on the accumulated past interest.

• simple interest

• prime interest

• compound interest

• terminal value

Which of the following describes the Interest?

• It is the amount that is charged for the privilege of borrowing money

• It refers to the person/institution who made the funds available.

• It refers to a person or institution who owes money.

• It is the amount of money originally invested or borrowed

What is 11.5% written in decimal?

• 115.0

• 1.15

• 0.115

• 0.0115

What is the frequency of conversion if the annual rate is compounded monthly?

• 1

• 4

• 2

• 12

What is the frequency of conversion if the annual rate is compounded semi-annually?

• 1

• 4

• 2

• 12

Given that P = ₱6500, r = 2.5% and t = 11 years, find the simple interest.

• ₱17,875.00

• ₱1,787.50

• ₱178.75

• ₱17.88

What do you call the type of annuity in which the payments are made at the beginning of each payment interval?

• Annuity Due

• Ordinary Annuities

• General Annuities

• Simple Annuities

What do you call the type of annuity in which the payment interval is the same with compounding period?

• Annuity Due

• Ordinary Annuities

• General Annuities

• Simple Annuities

Which of the following situations best represents a simple annuity?

• Borrowing Php. 2,000 from a friend and paying it back in a single lump sum after one year.

• Depositing Php. 500 quarterly into an account that pays 6% interest compounded annually.

• Making a Php. 200 deposit at the end of each month into a retirement fund that earns 4% interest compounded monthly.

• A one-time deposit of Php. 1,000 into a savings account with a 5% annual interest rate.

What type of annuity is represented by a deposit of ₱ 12,500.00 that is made at the end of every month to an account that earns 0.6% interest compounded monthly?

• ordinary simple annuity

• simple annuity due

• ordinary general annuity

• general annuity due