Download Chapter 1 Simple and compound interest

Maths Quest Maths A Year 12 for Queensland
Test Yourself
Chapter 1 Simple and compound interest Test Yourself
1
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
2
The interest on $12 167 invested for
5 years at 2.5% simple interest p.a.
would be nearest to:
A
$1220.87
B
$1521
C
$1520.88
D
$152.10
E
$152.09
C
Sarah received $75 interest on her term
deposit of $450 over 3 years. The
simple interest rate per annum was:
A
56%
B
5.6%
C
22%
D
0.55%
E
11.2%
B
Tom earned $504 when he invested
$16 820 for 8 months. His rate of
simple interest was:
A
0.37% p.a.
B
2.00% p.a.
C
3.00% p.a.
D
4.49% p.a.
E
5.00% p.a.
D
3
4
5
John invested a sum of money, which
earned $750 simple interest at the rate
of 6% per annum over 2 years. The
amount invested was:
A
$88.80
B
$6250
C
$3125
D
$2125
E
None of these.
B
6
Cathy invested $8200 at the rate of
C
4.5% p.a. It earned $738 simple interest.
The period of investment was:
A
6 months
B
1 year
C
2 years
D
2 years 6 months
E
3 years
7
A 500-g packet of chocolate costs
$2.50. Assuming inflation averages
2.8% per annum over each of the next
3 years, how much will the chocolate
cost in three years?
A
$2.64
B
$2.72
C
$2.79
D
$2.87
E
$2.95
B
8
An investment of $10 000 at the rate of
8% per annum, compounded quarterly,
will reach $14 800 in close to:
A
1 year
B
2 years
C
3 years
D
4 years
E
5 years
E
Maths Quest Maths A Year 12 for Queensland
9
10
Chapter 1 Simple and compound interest Test Yourself
An investment of $10 000 to be
C
invested for a period of 5 years and
compounded quarterly at 3.75% p.a.
will have a future value closest to which
of the following:
A
$10 480
B
$12 020
C
$12 050
D
$20 900
E
None of the above.
Tom has the choice of investing his
money in compound interest with rests
as indicated below. Which situation
would return him the most interest?
A
yearly rests
B
six-monthly rests
C
quarterly rests
D
monthly rests
E
daily rests
13
The value of A at the end of the time
period would be closest to:
A
$12 030
B
$12 070
C
$12 273
D
$15 657
E
$15 714
14
The growth of an investment over a
A
period of time is shown as a graph
which depicts a straight line. Which of
the following investments would depict
a straight line?
A
6% p.a. simple interest
B
6% p.a. compounding yearly
C
6% p.a. compounding quarterly
D
6% p.a. compounding monthly
E
6% p.a. compounding daily
15
How long would it take for $5000
invested at 5% p.a. compound interest
with yearly rests to double in value?
A
5 years
B
7 years
C
10 years
D
14 years
E
20 years
D
16
An interest rate of 4.5% p.a.
compounding monthly is equivalent to
an effective interest rate of:
A
4.50% p.a.
B
4.55% p.a.
C
4.57% p.a.
D
4.59% p.a.
E
4.60% p.a.
D
17
Which of the following compounding
rates is equivalent to an effective
interest rate of 2.75% p.a.?
A
2.7% p.a. compounding
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
B
E
Use the following information to
answer questions 11–13.
An amount of $12 000 is invested for a
period of 9 months at 3% p.a.
compounded monthly. The compound
interest formula to calculate the future
value of an investment over a period of
time is:
R 

A  P1 

 100  n 
11
nT
The value of T in the formula would be: A
9
A
12
B
C
D
E
12
1
3
9
12
The value of n in the formula would be: E
9
A
12
B
C
D
E
1
3
9
12
2
C
Maths Quest Maths A Year 12 for Queensland
Chapter 1 Simple and compound interest Test Yourself
18
Two banks pay simple interest on
short-term deposits. Bank A pays 5%
p.a. over 3 years, and Bank B pays
5.5% p.a. for 2 12 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
B
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
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
3
B