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Financial Mathematics Review Test

Total questions: 15

Worksheet time: 1hrs 22mins

Name
Class
Date
1.

How much interest do you earn if you invest $500 for 3 years at 5·6% p.a. simple interest?

a)

$840

b)

$28

c)

$5.60

d)

$84

2.

$7385 is borrowed for 204 days at a flat rate of 6% p.a. The simple interest to be paid is:

a)

$260.03

b)

$285.65

c)

$272.42

d)

$278. 61

3.

The total amount to be repaid on a loan of $580 over 7 months at 13·2% per annum (simple interest) is:

a)

580 ×13.2%×712+580\text{580}\ \times13.2\%\times\frac{7}{12}+580

b)

580×0.132×7+580580\times0.132\times7+580

c)

580×13.2+712+580580\times13.2+\frac{7}{12}+580

d)

580×13.2%×712580\times13.2\%\times\frac{7}{12}

4.

Hung received $6281 after investing $5900 for 27 months. The rate of simple interest in per cent per annum is closest to:

a)

0·03%

b)

2·9%

c)

0·47%

d)

4·7%

5.

If you wished to borrow $100 000, which of the following loan options would result in the lowest amount of simple interest being paid?

a)

5% for 7 years

b)

7% for 4 years

c)

6% for 5 years

d)

3% for 10 years

6.

$20 100 is invested at a rate of 6·9% p.a., compounded annually. The value of the investment after 2 years is closest to:

a)

$22 969.50

b)

$22 873.80

c)

$24 554.39

d)

$21 486.90

7.

Which of the rates of depreciation, 5% p.a., 6% p.a., 7% p.a. or 8% p.a., would cause a car valued at $9000 to drop in value to $7784 in 2 years?

a)

5% p.a.

b)

6% p.a

c)

7% p.a

d)

8% p.a.

8.

A sum of money invested for nine months at 12% p.a., compounded quarterly, accumulates to $5900. The initial deposit, in dollars, was:

a)

59001.034\frac{5900}{1.03^4}

b)

59001.1234\frac{5900}{1.12^{\frac{3}{4}}}

c)

59001.033\frac{5900}{1.03^3}

d)

5900×1.0435900\times1.04^3

9.

A car depreciates at a rate of 16% p.a. Its value after 3 years is $3676. What was its initial value?

a)

$4426

b)

$6202

c)

$7253

d)

$7383

10.

The table shows interest rates of term deposits for a period up to 2 years.

Samara invests $15 000 for 1 year. What is the value of her investment after 1 year?

a)

$15 712.50

b)

$15 720

c)

$15 727.50

d)

$15 738

11.

For the rest of the questions including Q11 work in your books and write your answer here!!

Q11. For how many months would $32 000 have to be invested at 9% p.a. simple interest to produce $1200 interest?

(a)  

12.

How much interest is earned if $15 000 is invested for 3 years at 4·5% p.a., compounded monthly?

(a)  

13.

How much more will an investor receive on an investment of $24 000 over five years in an account offering 7·5% p.a. if the interest is compounded monthly rather than annually?

(a)  

14.


WRITE ALL SIX ANSWERS FOR THE TABLE ONE AFTER ANOTHER WITH A COMMA AFTER EACH ANSWER(NO GAPS or $ SIGN)!!!

Q14) $1000 is invested at an annual interest rate of 5%.
 Complete the table below by calculating the interest received after each year for both simple interest and compound interest (compounded annually):




(a)  

15.

Explain the difference in the amount of simple interest received each year compared to the compound interest in Q 14.

4 lines