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EEPM Quiz 03 iNTEREST

Total questions: 10

Worksheet time: 19mins

Name
Class
Date
1.

The interest rate is effective when

a)

compounding period is not the same as interest period

b)

compounding period is given

c)

compounding period is not given

2.

Nominal interest rate is

a)

when compounding period is given

b)

when no compounding period is given

c)

when compounding period is given and it is not the same as interest period

3.

For a nominal interest rate of 30% per year, determine the nominal and effective rates per year for quarterly

a)

7.5% per year; 25%

b)

15% per year; 25%

c)

7.5% per year; 34%

d)

15% per year; 34%

4.

For an interest rate of 3.3% per month, determine the effective rates per year

a)

39.6%

b)

47.6%

c)

10.2%

d)

17.5%

5.

What is NOMINAL RATE OF INTEREST?

a)

Is a required rate of return on a fixed-income security that has no risk in an economic environment of zero inflation.

b)

It tell how much more purchasing power we have.

c)

It is equal to sum of real risk-free rate interest plus compensation for taking different types of risk and several risk premiums.

d)

It is cost of money when government issues the securities

6.

Your allowance of RM190 will earned an interest of 11% compounded annually for 1and 2/3 years. How much interest did you earn on your allowance?

a)

RM343.90

b)

RM153.90

c)

RM226.10

d)

RM36.10

7.

Karla invested RM1,000 in savings bonds. If the bonds earn 6.75% interest compounded every six months, how much total will Karla earn in 15 years?

a)

RM1,584.62

b)

RM2,651.39

c)

RM2,706.86

d)

RM1,825.10

8.

Olivia would like to buy some new furniture for her home. She decides to buy the furniture on credit with 9.5% interest compounded quarterly. If she spent RM7,400, how much total will she have paid after 8 years?

a)

RM15,415.94

b)

RM15,683.28

c)

RM15,927.56

d)

RM16,349.72

9.

Calculate the interest. I = PRT,

Principal = RM10000,

Rate = 7%,

Time = 20 years

a)

RM1400

b)

RM1000

c)

RM14000

d)

RM14

10.

Jerry borrowed RM4,000 for 5 years at 6% simple interest rate. How much interest is that?

a)

RM800

b)

RM1,000

c)

RM1,200

d)

RM1,500