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Multiple Choice. Encircle the letter of your choice. Any form of erasure means wrong.
20. An annual interest rate that can be compounded more than once a year?
A. Interest rate B. Nominal rate C. Effective rate D. Equivalent rate
23. An interest that is computed on the principal and then added to it?
A. Interest B. Simple Interest C. Compound Interest D. Maturity date
24. An interest that is computed on the principal and also on the accumulated past interests?
A. Interest B. Simple Interest C. Compound InterestD. Maturity date
25. What effective rate is equivalent to 12% compounded monthly while the equivalent rate is compounded semi-
annually?
A. 12.304% B. 11.052% C. 14.012% D. 13.561%
26. How long will it take for a sum of money to grow from P1, 250 to P10,000, if it is invested at 12.5% p.a simple
interest?
A. 8 years B. 64 years C. 72 years D. 56 years
27. Emily's mother deposits $3000 in a savings account towards her college education. She gets a compound interest of 14%
x
annually. The balance in the account is represented by the function rule f(x) = 3000 (1.14) , where x is the time in years. Find the
amount in the savings account after 7 years.
A. $7500 B. $7551 C. $7465 D. $7535
28. What will P1500 amount to in three years if it is invested in 20% p.a. compound interest, interest being compounded
annually?
A. 2400 B. 2678 C. 2592 D. 2540
29. Two annual rates with different conversion periods that will earn the same compound at the end of a given number
of years?
A. Interest rate B. Nominal rate C. Effective rate D. Equivalent rates
32. How long will it take P3,000 to accumulate to P3,500 in a bank savings account at 0.25% compounded monthly?
A. 67.61 years B. 67.67 years C. 67 yearsD. 61.67 years
33. At what interest rate compounded quarterly will money double itself in 10 years?
A. 7.0% B. .070 % C. 70% D. 7.1%
34. Suppose you invested P20, 000 at 3% compounded continuously. How much will you have from this investment after
6 years?
A. P22, 944.35 B. P23, 944.35C. P23, 934.35 D. P23, 943.35
35. Peter is planning to invest P100, 000. Bank A is offering 5% compounded semi-annually while Bank B is offering 4.5%
compounded monthly. If he plans to invest this amount for 5 years, in which bank should he invest?
A. Bank A B. Bank B C. Both bank A & B D. None of the above