Quiz 1

How does simple interest vary from compound interest?

• Simple interest is computed only once at the end of the term.

• Simple interest gives the same return as compound interest.

• Simple interest has a shorter term than that of a compound interest.

• Simple interest is based on the principal only, while compound interest includes past interest

Which will generate more interest in the following?

• Depositing ₱10,000 in a bank that offers a simple interest rate of 12% per annum for 2 years.

• Investing ₱10,000 in a cooperative for 2 years that provides a 12% interest rate compounded annually.

• Saving ₱500 each month for 2 years in a piggy bank without earning interest.

• Both a and b

Which bank offer would you prefer, if you wanted to invest money and you do not intend to withdraw it within two years?

• 5% simple interest per annum

• 4% compounded interest per annum

• 3% compounded interest semi-annually

• 2% compounded interest quarterly

Which of the following descriptions of the debtor or borrower is correct?

• It is the total sum borrowed or invested as of the date of origin.

• It is an individual who invest the money or provides the funds.

• It is an individual who obtains the funds from the lender or who owes the money.

• It is the interest calculated using both the principal and the total accumulated previous interest

What formula should be used to find the present value?

• P = I_srt

How much is the present value?

• ₱ 25,000.00

• ₱ 23, 558.06

• ₱22, 307.15

• ₱20, 432.75

How much is the compound interest?

• ₱ 1,999.75

• ₱ 1,441.94

• ₱ 1,592.85

• ₱ 1,167.25

What formula should be used to determine the maturity value?

• F = P(1 + j)mt

• F = Ic (1 + j)n

What will be its 5-year maturity value, if she takes out a loan at Markes Rural Bank?

• ₱ 207,660.68

• ₱ 266,071.86

• ₱ 367,071.88

• ₱ 376,716.66

How much is the interest of the amount borrowed after 5 years for problem number 8?

• ₱ 126,716.66

• ₱ 117,071.88

• ₱ 42,339.32

• ₱ 16,071.86