This quiz works best with JavaScript enabled. Home > Unit V Mathematical Reasoning And Aptitude > Compound Interest – Quiz 8 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Compound Interest Quiz 8 (10 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Ricco deposits $ 500 in an account that earns 2.5% interest compounded annually for 3 years. Wally deposits $ 500 in an account that earns 5.1% interest compounded annually for 2 years. Who will earn the greatest amount of interest? A) Ricco will earn $ 13.85 more than Wally. B) Wally will earn $ 13.85 more than Ricco. Show Answer Correct Answer: B) Wally will earn $ 13.85 more than Ricco. 2. Kayla invests $ 5,076 in a savings account with a fixed annual interest rate of 9%, compounded 12 times per year. What will the account balance be after 6 years? A) $ 8,692.92. B) $ 8,437.84. C) $ 7,947.40. D) $ 7,752.58. Show Answer Correct Answer: A) $ 8,692.92. 3. Bank promises to give you Rs.5000 after 3 years at the rate of 10% interest. How much you should deposit today? A) 3700. B) 3732. C) 3600. D) 3757. Show Answer Correct Answer: D) 3757. 4. Emma deposits $ 1200 into an account that pays 3% interest, compounded monthly. What is her ending balance after one year? A) $ 1,613.87. B) $ 1,709.91. C) $ 1,236.50. D) $ 1,203.00. Show Answer Correct Answer: C) $ 1,236.50. 5. How does compounding affect the future value of money? A) Compounding increases the future value of money by allowing it to grow at an accelerating rate. B) Compounding has no effect on the future value of money. C) Compounding only affects the present value of money. D) Compounding decreases the future value of money by slowing down its growth. Show Answer Correct Answer: A) Compounding increases the future value of money by allowing it to grow at an accelerating rate. 6. A major supplier has offered Big Co a discount of 0.5% for settlement of invoices after 10 days rather than the usual 30 days. Assuming 365 days in a year, what is the annual effective rate to Big Co of taking up this offer? A) 6.3%. B) 9.5%. C) 20.0%. D) Insufficient information to calculate. Show Answer Correct Answer: B) 9.5%. 7. Money grows faster as the compounding period becomes shorter A) True. B) False. Show Answer Correct Answer: A) True. 8. If you save RM1,000 yearly at 5% interest for 5 years, what is the future value? A) RM5,000. B) RM5,525.63. C) RM6,000. D) RM4,800. Show Answer Correct Answer: B) RM5,525.63. 9. Rajeev had a dream where he was able to open a 20-year CD that guaranteed 10% annual interest compounded monthly. If Rajeev puts $ 100 in the account, how much will he have after 20 years? A) $ 732.81. B) $ 300.24. C) $ 672.75. D) $ 508.37. Show Answer Correct Answer: A) $ 732.81. 10. A compound interest account has accrued an account balance of $ 1,159.27 over the course of 5 years. The interest rate paid was 3%. Which is closest to the principal amount on the account? A) $ 1,000. B) $ 1,300. C) $ 300. D) $ 4,300. Show Answer Correct Answer: A) $ 1,000. ← 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 9Compound Interest Quiz 10Compound Interest Quiz 11 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books