This quiz works best with JavaScript enabled. Home > Unit V Mathematical Reasoning And Aptitude > Compound Interest – Quiz 14 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Compound Interest Quiz 14 (10 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Julia invested $ 1000 for college in an account earning 5% compounded annually. When she checked the account after 4 years, how much money did she find in the account? A) Not enough. B) $ 563.24. C) $ 1215.51. D) $ 3200.12. Show Answer Correct Answer: C) $ 1215.51. 2. To earn as much interest as possible, you should open a savings account that earns ..... interest and has the ..... interest rate. A) Compound; lowest. B) Simple; lowest. C) Compound; highest. D) Simple; highest. Show Answer Correct Answer: C) Compound; highest. 3. Which of the following is used to calculate the future value of an investment? A) Discounting. B) Compounding. C) Depreciation. D) Amortization. Show Answer Correct Answer: B) Compounding. 4. Given an investment of Rs. 10,000 for a period of one year, it is better to invest in a scheme that pays: A) 12% interest compounded annually. B) 12% interest compounded quarterly. C) 12% interest compounded monthly. D) 12% interest compounded daily. Show Answer Correct Answer: D) 12% interest compounded daily. 5. In the formula for compound interest, what does the n stand for? $A=P\left(1+\frac{r}{n}\right)^{\left(n\right)\left(t\right)}$ A) Number of compounding periods per year. B) Number of years. C) Number of deposits. D) Number of dollars. Show Answer Correct Answer: A) Number of compounding periods per year. 6. With an annual interest rate of 3%, prices will double in ..... years. A) 12. B) 24. C) 15. D) 20. Show Answer Correct Answer: B) 24. 7. Which of the following statements about compound interest is true? A) Compound interest is always lower than simple interest. B) Compound interest is only calculated annually. C) Compound interest calculations ignore the effect of time. D) Compound interest makes you richer if you are the creditor. E) Compound interest can result in exponential growth of an investment. Show Answer Correct Answer: E) Compound interest can result in exponential growth of an investment. 8. Compounding can thus be construed as interest on ..... the effect of which is to magnify returns to interest over time, the so-called "miracle of compounding." A) Investment. B) Principal. C) Capital. D) Interest. Show Answer Correct Answer: D) Interest. 9. Damon's father started a college fund on Damon's 9th birthday. He deposited $ 2,500 into a CD (certificate of deposit) that yields an interest rate of 0.53% compounded annually. How much money will the CD be worth when Damon turns 17 years old? A) $ 2,621.81. B) $ 2,735.06. C) $ 2,607.99. D) $ 225.25. Show Answer Correct Answer: C) $ 2,607.99. 10. Krystal has $ 3000 invested at a 2% compounded interest rate. Which expression can be used to determine how much money Krystal had after 16 years? A) $A=3000\left(1+.02\right)^{16}$. B) $A=3000\left(1-.02\right)^{16}$. C) $A=16\left(1+.2\right)^{3000}$. D) $A=3000\left(.2\right)^{16}$. Show Answer Correct Answer: A) $A=3000\left(1+.02\right)^{16}$. ← PreviousNext →Related QuizzesCompound Interest Quiz 1Compound Interest Quiz 2Compound Interest Quiz 3Compound Interest Quiz 4Compound Interest Quiz 5Compound Interest Quiz 6Compound Interest Quiz 7Compound Interest Quiz 8Compound Interest Quiz 9Compound Interest Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books