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Test: Interest - SAT MCQ


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10 Questions MCQ Test Mathematics for SAT - Test: Interest

Test: Interest for SAT 2024 is part of Mathematics for SAT preparation. The Test: Interest questions and answers have been prepared according to the SAT exam syllabus.The Test: Interest MCQs are made for SAT 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Interest below.
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Test: Interest - Question 1

If you borrow $10,000 for 2 years at a simple interest rate of 5%, how much interest will you pay?

Detailed Solution for Test: Interest - Question 1

Test: Interest - Question 2

If you deposit $1,000 into a savings account that pays 4% interest compounded annually, how much will you have in the account after 3 years?

Detailed Solution for Test: Interest - Question 2

To calculate compound interest, we use the formula A = P(1 + r/n)(nt), where A is the ending amount, P is the principal, r is the interest rate, n is the number of times the interest is compounded per year, and t is the number of years.
Plugging in the values,
we get A = 1,000(1 + 0.04/1)(1x3)
= $1,124.86

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Test: Interest - Question 3

If the principal amount is $800, the rate of interest is 6%, and the time period is 1.5 years, what will be the total interest earned if interest is simple interest?

Detailed Solution for Test: Interest - Question 3

Using the formula for simple interest,
I = Prt, where P = 800, r = 6%, and t = 1.5 years,
we get I = 8000.061.5
= $72

Test: Interest - Question 4

If the principal amount is $500, the rate of interest is 10%, and the time period is 3 years, what will be the total amount after 3 years if interest is compounded semi-annually?

Detailed Solution for Test: Interest - Question 4

Using the formula for compound interest,
A = P(1 + r/n)(nt), where P = 500, r = 10%, t = 3 years, and n = 2 (compounded semi-annually),
we get A = 500(1 + 0.1/2)(2 x 3)
= $684.70

Test: Interest - Question 5

If the principal amount is $1000, the rate of interest is 5%, and the time period is 2 years, what will be the total amount after 2 years if interest is compounded annually?

Detailed Solution for Test: Interest - Question 5

Using the formula for compound interest, A = P(1 + r/n)(nt), where P = 1000, r = 5%, t = 2 years, and n = 1 (compounded annually),
we get A = 1000(1 + 0.05/1)(1x2)
= $1102.50

Test: Interest - Question 6

If you invest $1,000 for five years at an annual interest rate of 4%, compounded quarterly, what will be the value of your investment at the end of five years?

Detailed Solution for Test: Interest - Question 6

The formula for compound interest is A = P(1 + r/n)(nt), where A is the amount after time t, P is the principal, r is the annual interest rate, n is the number of times interest is compounded per year, and t is the time in years. Plugging in the given values,
we get A = 1,000(1 + 0.04/4)(4x5)
= $1,217.86.
Round to the nearest cent, the answer is B) $1,217.86.

Test: Interest - Question 7

What is the simple interest on a loan of $1,000 at a 5% annual interest rate after 3 years?

Detailed Solution for Test: Interest - Question 7

To find the simple interest,
we use the formula: Interest (I) = Principal (P) x Rate (R) x Time (T).
Here, P = $1,000, R = 5/100 = 0.05, and T = 3 years.
Therefore, I = 1000 x 0.05 x 3 = $150.

Test: Interest - Question 8

If the interest on a $500 investment is $60 after 2 years, what is the annual simple interest rate?

Detailed Solution for Test: Interest - Question 8

Using the simple interest formula, I = P x R x T,
we can find the interest rate: R = I / (P x T).
Here, I = $60, P = $500, and T = 2 years.
Therefore, R = 60 / (500 x 2)
= 0.06 or 6%.

Test: Interest - Question 9

If you invest $5,000 in a 5-year certificate of deposit (CD) with a 3% annual interest rate compounded yearly, how much interest will you earn?

Detailed Solution for Test: Interest - Question 9

To find the total amount, we use the formula: A = P x (1 + R)T.
Then we subtract the principal to find the interest earned.
Here, P = $5,000, R = 0.03, and T = 5 years.
Therefore, A = 5000 x (1.03)5 = $5796.
The interest earned is $5796 - $5000 = $796.

Test: Interest - Question 10

If the interest on a $1,000 investment is $200 after 5 years, what is the annual simple interest rate?

Detailed Solution for Test: Interest - Question 10

Using the simple interest formula, I = P x R x T,
we can find the interest rate: R = I / (P * T). Here, I = $200, P = $1,000, and T = 5 years.
Therefore, R = 200 / (1000 x 5)
= 0.04 or 4%.

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