Chapter 5 Review: Saving and Investing

The amount of money that is originally saved or invested is called the:

• Interest

• Principal

• Future Value

• Present Value

The simple interest formula is:

• S = dt

• I = P + r + t

• I = P - r - t

• I = Prt

The r in the simple interest formula stands for:

• interest rate

• revenue

• principal

• receiving

Future Value or FV =

• Principal x Interest

• Principal + Interest

• Principal - Interest

• Principal + Present Value

Which type of interest typically grows faster?

• Simple Interest

• Compound Interest

GIC stands for:

• General Investing Clause

• Great Investment Choice

• Get Investment Corporation

• Guaranteed Investment Certificate

$500 is invested in a 3-year term deposit that pays 2.5% simple interest. What is the principal (P or PV)?

• $3

• $500

• $0.025

• $37.50

$500 is invested in a 3-year term deposit that pays 2.5% simple interest. Calculate the interest earned on the investment.

• $12.50

• $500

• $50

• $37.50

$500 is invested in a 6 month term deposit that pays 2.5% simple interest. Calculate the interest earned on the investment.

• $12.50

• $6.25

• $50

• $37.50

$500 is invested term deposit that pays 2.5% simple interest. How many years would it take for the investment to double in value?

• 40 years

• 5 years

• 10 years

• 6 months