Question 1
If You-Will-Never-Pay-It-Off Loan Company lends you $150 on Monday, and you have to pay $250 after 15 days, what effective rate of interest is it charging? Assume the company compounds money on a 15-day basis.
Answer
11,890%
27,478%
208,456%
22,140,802%
Question 2
If a bank gives you an interest rate of 6% per year compounded monthly, what is the effective rate that your account is earning per year?
Answer
6.0%
6.0564%
6.1678%
6.2563%
Question 3
You-Will-Never-Pay-It-Off Loan Company lends you $150 on Monday, and you have to pay $250 after 15 days. If you kept the money for a year on the same terms, how much will you owe at the end of the year. Assume the company compounds money on a 15-day basis.
Answer
Around $120,000
Around $5M
Around $24.5 million
Around $33 million
Question 4
Atriatics, Inc., charges its credit customers 2.65% interest per month, compounded monthly. What is the annual effective rate that their customers are paying?
Answer
31.8%
34.29%
36.87%
38.56%
Question 5
If a credit card is charging you 21% per annum, compounded weekly, what is the rate you are paying?
Answer
21.25%
23.31%
24.87%
25.78%
Question 6
If you deposit $3,000 at the end of every quarter in a savings account that pays a nominal APR of 6% per year, compounded weekly, how much will you have at the end of a year?
Answer
$12,275
$12,895
$13,785
$14,897
Question 7
Americo Inc., advertises that they pay 12% APR compounded daily on your money if you deposit $500 a month for 5 years. How much will you have accumulated at the end of 5 years?
Answer
$36,478
$40,898
$43,895
$58,498
Question 8
If you took a loan of $10,000 from a bank that is charging 8% per year compounded monthly, how much money will you have to pay at the end of one year if you made no payments in between?
Answer
$10,000
$10,245
$10,562
$10,830
Question 9
How much will you have if you deposit $2,000 in a bank that pays 12% nominal interest,…