Financial Mathematics Question Preview (ID: 47368)
The Test Is Based On Study Area 3.
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Two banks pay simple interest on short-term deposits. Bank A pays 6% p.a. over 4 years and Bank B pays 6.5% p.a. for 3.5 years. The difference between the two banks’ final payout figure if $5000 was invested in each account is:
a) $62.50
b) $0
c) $1200
d) $1137.50
Clayton invested $360 in a bank for 3 years at 8% simple interest each year. At the end of the 3 years, the total amount he will receive is:
a) $86.40
b) $236.80
c) $28.80
d) $446.40
A loan of $5000 is taken over 5 years. The simple interest is calculated monthly. The interest bill on this loan is $1125. The simple interest rate per year on this loan is:
a) 3%
b) 4.5%
c) 3.75%
d) 5%
A loan of $10 000 is taken over 10 years. The total interest bill on this loan is $2000. The simple interest rate per year on this loan is:
a) 3%
b) 4.5%
c) 2%
d) 5%
A 6-year bond pays 8.5 % p.a. simple interest. If Rhonda buys a bond worth $500, the interest she would earn would be:
a) $250
b) $255
c) $2550
d) $233.75
Simple interest was calculated on a term deposit of 5 years at 3.75 % p.a. When Leigh calculated her total return on her investment principal of $350, her return was:
a) $415.63
b) $400
c) $65.63
d) $131.25
An investment of $4500 earns compound interest at a rate of 6.4% p.a. and is made for 5 years. The balance in the account at the end of the investment period, if interest is compounded quarterly, is:
a) $6181.40
b) $4871.71
c) $6136.50
d) $15 561.27
After 4.5 years $1200 has grown to $1750 in an account where interest is compounded monthly. The annual interest rate is:
a) 7.0%
b) 0.7%
c) 8.4%
d) 3.2%
A sum of $850 is invested at 8% p.a. compound interest, credited fortnightly. For the balance to grow to $1200 the investment should be left for a minimum of:
a) 112 years
b) 113 years
c) 4 years 8 fortnights
d) 4 years 9 fortnights
In an account which pays compound interest at 12% p.a., credited daily, an investment of $13 000 will accrue $4000 interest in:
a) 2 years 86 days
b) 2 years 87 days
c) 3585 days
d) 9 years 301 days
A loan of $14 000 is taken out over 4 years at 9.75% p.a. (debited fortnightly) on the outstanding balance. The fortnightly repayment needed to repay the loan in full, to the nearest dollar, is:
a) $135
b) $145
c) $163
d) $170
Rachel repaid a reducing balance loan of $22 000 in 5 years by quarterly repayments and with interest charged quarterly at 8.2% p.a. on the outstanding balance. The total amount of interest that she paid was closest to:
a) $27 000
b) $5000
c) $5100
d) $9000
The number of monthly repayments required to repay a $41 000 reducing balance loan in full, if the repayments are $588.39 and interest is debited monthly at 10.5% p.a., will be closest to:
a) 100
b) 110
c) 600
d) 500
A reducing balance loan of $56 000 is repaid by quarterly instalments of $1332.24 over 15 years at an interest rate of 5% p.a. (adjusted quarterly). If, instead, repayments of $1500/quarter were made throughout the loan, the term of the loan would
a) 15 years
b) 14 years
c) 12.75 years
d) 12.5 years
A reducing balance loan of $24 000 attracting interest at 6.5% p.a. can be repaid over 5 years by either quarterly repayments of $1415.18 or fortnightly repayments. The fortnightly repayment value is between:
a) $200 and $220
b) $120 and $140
c) $140 and $160
d) $180 and $200
A pearl necklace is purchased on hire-purchase for $225 deposit with equal monthly payments of $80 for 2 years. The cash price is $2000. The interest rate is:
a) 3.5%
b) 6%
c) 4%
d) 8%
A hire-purchase contract specifies that there are to be monthly payments for 2 years. The flat rate of interest is 6.3% p.a. The effective interest rate for this contract is closest to:
a) 12.1%
b) 11.6%
c) 8.4%
d) 6.3%
A wealthy businesswoman sets up a cancer research grant. She invests $125 000 into government bonds that offer 5% p.a. calculated annually. The annual grant would be:
a) $1560
b) $6250
c) $1250
d) $6370
A scholarship of $500 per term is provided for by a perpetuity invested in a fund offering 4.8% per annum, compounded quarterly. The amount that needs to be invested is closest to:
a) $10 400
b) $41 700
c) $166 700
d) $20 800
Jarrod saves $500 per month in an account that pays interest at a rate of 6% per annum, compounding monthly. If he makes regular monthly payments of $500 to the account, how much will he have in the account at the end of 10 years?
a) $81 939.67
b) $81 939.66
c) $82 000
d) $80 000
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