Compound Interest Quiz 6 (10 MCQs)

Quiz Instructions

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1. The process of determining present value is known as:

Correct Answer: C) Discounting.

2. The longer the money is invested, the higher the interest paid on the CD.

Correct Answer: A) True.

3. If an investment grows to $ 10,000 in 8 years with an interest rate of 7%, what was the initial investment amount?

Correct Answer: A) 5810.21.

4. John invested $ 6,000 into an account that pays 8% annual compound interest. What will the balance of his account be after 6 years?

Correct Answer: A) 9,521.25.

5. What is the equivalent rate of interest per annum, compounded annually for the rate of interest of 12% per annum, compounded semi-annually?

Correct Answer: C) 12.36%.

6. If you invest $ 500 at an interest rate of 3% compounded monthly, what will be the future value after 2 years?

Correct Answer: D) 530.84.

7. Effective rate of interest takes into account:

Correct Answer: B) Compounding periods within the year.

8. If you want to double your investment in 10 years, what interest rate would you need if compounded annually?

Correct Answer: B) 7.2%.

9. The least number of complete years in which a sum of money put out at 20% compound interest will be more than doubled is:

Correct Answer: C) 4 years.

10. Queenie deposited $ 4500 in her bank account at 4% per year compound interest. Find the total amount in her account at the end of 3 years.

Correct Answer: A) $ 5061.88.