The compound interest formula accounts for the principal, rate, and time.
Simple Interest Concepts

Quiz
•
Business
•
12th Grade
•
Hard
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20 questions
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1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
The exponent in the compound interest formula represents the number of compounding periods.
The principal amount is the total amount after interest is applied.
The rate is always fixed and does not change over time.
The time period is irrelevant in calculating compound interest.
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Show All Steps
Examiners prefer clear working, so show all calculation steps.
It's acceptable to skip steps if you understand the material.
Only show steps if you have time during the exam.
You can use shorthand for calculations.
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
In the formula for time (T), I represents interest, P represents principal, and R represents rate. What is the value of interest (I)?
5,000
6,750
7,500
8,000
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Monthly Compounding
When compounding monthly, n = 12.
When compounding monthly, n = 6.
When compounding monthly, n = 10.
When compounding monthly, n = 4.
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
If the principal amount is increased in the simple interest formula, the total interest earned or paid increases.
Higher principal amounts lead to more interest.
The interest remains the same regardless of the principal amount.
Lower principal amounts yield higher interest rates.
Interest is only affected by the time period, not the principal.
6.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
The time variable represents time in years in the simple interest formula.
Time is measured in months.
Time is measured in days.
Time is measured in years.
Time is measured in weeks.
7.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
The missing rate (R) is determined to be 7%.
T = @@\frac{I}{P \times R}@@
T = @@I \times P \times R@@
T = @@\frac{P}{I \times R}@@
T = @@\frac{R}{I \times P}@@
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