Interest Rates and Loan Calculations Quiz
Explore interest rate modeling with our quiz! Learn about simple and compound interest, loan types, APR, inflation impact, and more in finance.
#1
What is the formula for simple interest?
P x r x t
(P + r + t) / 100
(P x r x t) / 100
P / r / t
#2
Which of the following factors affect the interest rate on a loan?
Loan amount
Loan term
Credit score
All of the above
#3
What is the formula for compound interest?
P x (1 + r)^t
(P + r)^t
P x r x t
P x (1 + r / n)^(n x t)
#4
How does inflation typically affect interest rates?
Increases them
Decreases them
No effect
Can increase or decrease them depending on other factors
#5
How does a longer loan term affect the total amount repaid?
Increases it
Decreases it
Has no effect
Can increase or decrease depending on the interest rate
#6
Which of the following is true about adjustable-rate loans?
Interest rates remain fixed throughout the loan term.
Monthly payments remain the same throughout the loan term.
Interest rates can change periodically.
None of the above.
#7
Which of the following is an advantage of a fixed-rate loan?
Predictable monthly payments
Interest rate can decrease
Higher risk of default
None of the above
#8
What is the difference between APR and interest rate?
APR includes all fees, while interest rate does not.
Interest rate includes all fees, while APR does not.
APR and interest rate are the same thing.
None of the above.
#9
What is the rule of 72 used for in finance?
Calculating loan payments
Estimating the time it takes for money to double at a given interest rate
Determining credit score
None of the above
#10
What is the difference between nominal and real interest rates?
Nominal interest rates include inflation, while real interest rates do not.
Real interest rates include inflation, while nominal interest rates do not.
Nominal and real interest rates are the same thing.
None of the above.
#11
What is the effect of compounding frequency on compound interest?
Higher compounding frequency leads to lower compound interest.
Higher compounding frequency leads to higher compound interest.
Compounding frequency has no effect on compound interest.
Compounding frequency affects only simple interest.
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