Earning Interest Quiz

What is the term for the fee paid to use money, usually expressed as a percentage?

• Principal

• Installments

• Interest

• Compound

Which type of account pays interest on funds deposited?

• Government Bonds

• Bank Savings Account

• Money Market Funds

• Short-term Loans

What are bonds issued by the government that are tax exempt called?

• Money Market Funds

• Bank Savings Account

• Government Bonds

• Short-term Loans

What is the term for the amount invested?

• Interest

• Principal

• Installments

• Yield

What is the formula for calculating Simple Interest?

• I = P * R * T

• I = P + R + T

• I = P / R / T

• I = P - R - T

What does APY stand for?

• Annual Percentage Rate

• Annual Payment Yield

• Annual Percentage Yield

• Annual Principal Yield

What is the relationship between risk and rate of return?

• Higher risk leads to a lower rate of return

• Higher risk leads to a higher rate of return

• Risk does not affect the rate of return

• Lower risk leads to a higher rate of return

What is the Power of 72 used for?

• Calculating the interest rate

• Estimating how long it will take to double an investment

• Determining the risk of an investment

• Calculating market interest rates

How is the Power of 72 calculated?

• By multiplying 72 by the interest rate

• By adding 72 to the interest rate

• By dividing 72 by the interest rate

• By subtracting the interest rate from 72

What affects market interest rates?

• The Federal Funds Rate

• Supply and demand of credit

• The Power of 72

• Risk levels