#1
If the principal amount is $1000, the interest rate is 5%, and the time is 3 years, what is the compound interest compounded annually?
#2
If the principal amount is $1200, the interest rate is 8%, and the time is 4 years, what is the simple interest?
#3
What is the formula for simple interest?
P * (1 + r/n)^(nt)
P * r * t
P + r + t
(P * r * t) / n
#4
What is the formula for compound interest?
P * r * t
P * (1 + r/n)^(nt)
P + r + t
(P * r * t) / n
#5
What is the effective annual rate (EAR) if the nominal interest rate is 6% and compounded quarterly?
#6
What is the difference between simple interest and compound interest?
Simple interest is calculated only on the initial principal, while compound interest includes interest on interest.
Compound interest is calculated only on the initial principal, while simple interest includes interest on interest.
Simple interest is calculated without considering time, while compound interest is time-dependent.
Compound interest is calculated without considering time, while simple interest is time-dependent.
#7
If the compound interest for an investment is $450, the principal is $3000, and the time is 2 years, what is the annual interest rate?
#8
How does the compounding frequency affect the compound interest for a given principal, interest rate, and time?
Higher compounding frequency results in lower compound interest.
Higher compounding frequency results in higher compound interest.
Compounding frequency does not affect compound interest.
Compounding frequency affects simple interest, not compound interest.
#9
What is the continuous compounding formula for compound interest?
P * (1 + r/n)^(nt)
P * e^(rt)
P + r + t
(P * r * t) / n
#10
If the present value of an investment is $5000, and the future value is $7000, what is the interest rate over 3 years?
#11
What is the relationship between the nominal interest rate, the real interest rate, and inflation?
Nominal interest rate = Real interest rate - Inflation
Nominal interest rate = Real interest rate + Inflation
Nominal interest rate = Real interest rate * Inflation
Nominal interest rate = Inflation - Real interest rate
#12
What is the present value of $1500 to be received in 3 years if the discount rate is 5% annually?
$1300.70
$1350.00
$1428.57
$1436.89
#13
If the interest rate is 12% per annum, what is the future value of $1000 after 2 years compounded semi-annually?
$1123.36
$1124.48
$1132.48
$1134.72