GenMath Long Test for Finals

What interest remains constant throughout the investment term?

• simple

• compound

• annuity due

• ordinary annuity

It is an interest computed based on the principal amount.

• simple

• compound

• annuity due

• ordinary annuity

What is the difference between simple and compound interest?

• Simple yields higher interest than compound interest.

• Simple interest has a shorter term than compound interest.

• Simple interest is always better than compound interest.

• Simple interest is computed based on the principal while compound interest is computed based on the principal and also on the accumulated past interests.

If you would like to invest money, which bank offer would you prefer if you do not plan to withdraw your money in 2 years?

• 5% simple interest per annum

• 4% compounded interest per annum

• 3% compounded interest semi-annually

• 2% compounded interest quarterly

Which of the following statement is true about the borrower or debtor?

• It is the amount of money borrowed or invested on the origin date.

• It is the interest computed on the principal and also on the accumulated past interests

• It refers to the person (or institution) who owes the money or avails of the fund from the lender.

• It refers to the person (or institution) who invests the money or makes the funds available.

Which of the following statements is/are true?

I. Compound interest of a loan favors the borrower.

II. Simple interest remains constant throughout the investment term.

III. In compound interest, the interest from the previous year also earns interest

• I only

• I and II

• II and III

• I and III

Which of the following formula can be used to solve for the simple interest?

• I = Prt

• A= P(1 + rt)

• All of the choices

It is an amount after t years that the lender receives from the borrower on the maturity date.

• loan date

• maturity date

• maturity value

• term

Which of the following describes time or term?

• It is the date on which money is received by the borrower.

• It is the amount of time in years the money is borrowed or invested; length of time between the origin and maturity dates

• It is the date of which the money borrowed or loan is to be completely repaid

• It is the amount paid or learned for the use of money.

It is the amount of money borrowed or invested on the origin date.

• future value

• principal value

• maturity value

• repayment value