Maths Quest Maths A Year 12 for Queensland Chapter 1 Simple and compound interest Test Yourself 1
Test Yourself Chapter 1 Simple and compound interest Name: ______All Multiple Choice
1 The yearly interest payable on a deposit B of $250 at 5.5% p.a. simple interest is: A $137.50 B $13.75 C $12.50 D $125.00 E $17.35 6 Cathy invested $8200 at the rate of C 4.5% p.a. It earned $738 simple interest. The period of investment was: 2 The interest on $12 167 invested for C A 6 months 5 years at 2.5% simple interest p.a. B 1 year would be nearest to: C 2 years A $1220.87 D 2 years 6 months B $1521 E 3 years C $1520.88 D $152.10 E $152.09 7 A 500-g packet of chocolate costs B $2.50. Assuming inflation averages 2.8% per annum over each of the next 3 Sarah received $75 interest on her term B 3 years, how much will the chocolate deposit of $450 over 3 years. The cost in three years? simple interest rate per annum was: A $2.64 A 56% B $2.72 B 5.6% C $2.79 C 22% D $2.87 D 0.55% E $2.95 E 11.2%
8 An investment of $10 000 at the rate of E 4 Tom earned $504 when he invested D 8% per annum, compounded quarterly, $16 820 for 8 months. His rate of will reach $14 800 in close to: simple interest was: A 1 year A 0.37% p.a. B 2 years B 2.00% p.a. C 3 years C 3.00% p.a. D 4 years D 4.49% p.a. E 5 years E 5.00% p.a.
9 An investment of $10 000 to be C 5 John invested a sum of money, which B invested for a period of 5 years and earned $750 simple interest at the rate compounded quarterly at 3.75% p.a. of 6% per annum over 2 years. The will have a future value closest to which amount invested was: of the following: A $88.80 A $10 480 B $6250 B $12 020 C $3125 C $12 050 D $2125 D $20 900 E None of these. Maths Quest Maths A Year 12 for Queensland Chapter 1 Simple and compound interest Test Yourself 2
E None of the above. 13 The value of A at the end of the time C period would be closest to: A $12 030 B $12 070 C $12 273 D $15 657 E $15 714 10 Tom has the choice of investing his E money in compound interest with rests as indicated below. Which situation 14 The growth of an investment over a A would return him the most interest? period of time is shown as a graph A yearly rests which depicts a straight line. Which of B six-monthly rests the following investments would depict C quarterly rests a straight line? D monthly rests A 6% p.a. simple interest E daily rests B 6% p.a. compounding yearly C 6% p.a. compounding quarterly D 6% p.a. compounding monthly Use the following information to E 6% p.a. compounding daily answer questions 11–13.
An amount of $12 000 is invested for a 15 How long would it take for $5000 D period of 9 months at 3% p.a. invested at 5% p.a. compound interest compounded monthly. The compound with yearly rests to double in value? interest formula to calculate the future A 5 years value of an investment over a period of B 7 years time is: C 10 years nT R D 14 years A P1 100 n E 20 years
11 The value of T in the formula would be: A 9 16 An interest rate of 4.5% p.a. D A 12 compounding monthly is equivalent to B 1 an effective interest rate of: C 3 A 4.50% p.a. D 9 B 4.55% p.a. E 12 C 4.57% p.a. D 4.59% p.a. E 4.60% p.a. 12 The value of n in the formula would be: E A 9 12 17 Which of the following compounding B B 1 rates is equivalent to an effective C 3 interest rate of 2.75% p.a.? D 9 A 2.7% p.a. compounding E 12 six-monthly B 2.75% p.a. compounding yearly C 2.6% p.a. compounding quarterly D 2.6% p.a. compounding monthly E 2.6% p.a. compounding daily Maths Quest Maths A Year 12 for Queensland Chapter 1 Simple and compound interest Test Yourself 3
18 Two banks pay simple interest on B short-term deposits. Bank A pays 5% p.a. over 3 years, and Bank B pays 1 5.5% p.a. for 2 2 years. The difference between the two banks’ final payout figure, if $10 000 was invested in each account is: A $0 B $125 C $250 D $1375 E $1500
19 Paul wishes to invest $10 000 for a B period of 5 years. Which of the following investments would be best for him? A 6.7% p.a. simple interest B 6.75% p.a. compound interest with yearly rests C 6.5% p.a. compound interest with quarterly rests D 6.25% p.a. compound interest with monthly rests E 6% compound interest with daily rests.
20 An investment of $6000 was placed for B 3 years at 4.25% p.a. compounded annually. How much more would be collected if the investment was compounded quarterly? A No more B $13.36 C $32.97 D $46.33 E $52.29 Maths Quest Maths A Year 12 for Queensland Chapter 1 Simple and compound interest Test Yourself 4