QUIZ 1- Q2- GM

In the simple interest formula 𝐼=𝑃𝑟𝑡, the 𝐼 always refers to the rate of interest charged for the use of money.

• TRUE

• FALSE

The interest period is the time period for which interest is charged.

• TRUE

• FALSE

The maturity value of an amount is the principal plus the interest.

• TRUE

• FALSE

In the simple interest formula, 𝐼=𝑃𝑟𝑡, the 𝑡 is always expressed in years.

• TRUE

• FALSE

Compound interest is a type of interest where the interest due at the end of a certain period is added to the principal and that sum earns for the next period.

• TRUE

• FALSE

What do you call the amount paid for using someone else’s money?

• INTEREST

• BORROWED MONEY

• MATURITY

• PRINCIPAL

What is the total amount returned after the agreed period of loan or investment?

• INTEREST

• MATURITY VALUE

• RATE

• PRINCIPAL

What type of interest is used when the interest due at the end of a certain period is added to the principal whose sum earns interest for the next period?

• COMPOUND

• SIMPLE

• ANNUITY DUE

• AMORTIZATION

Which of the following is the correct compounding period and the value of n.

• Annually, n=12

• Annually, n=1

• Monthly, n=6

• Semi annually, n= 4

Gab got a summer job at a salon. Suppose he saved ₱1,400 of her pay and deposited the amount into an account that earns simple interest per annum. After 6 months, his balance is ₱1,421. What is the rate of interest?

• 3%

• 4%

• 5%

• 6%