GENERAL MATHEMATICS
Interest, Maturity, Future, and Present Values in Simple and Compound Interests
BACKGROUND KNOWLEDGE
Choose the letter of the best answer. Write the chosen letter on a separate sheet of
paper.
1. What interest remains constant throughout the investment term?
a. simple
b. compound
c. annuity due
d. ordinary annuity
2. It is an interest computed based on the principal amount.
a. simple
b. compound
c. annuity due
d. ordinary annuity
3. What is the difference between simple and compound interest?
a. Simple yields higher interest than compound interest.
b. Simple interest has a shorter term than compound interest.
c. Simple interest is always better than compound interest.
d. Simple interest is computed based on the principal while compound interest is
computed based on the principal and also on the accumulated past interests.
4. If you would like to invest money, which bank offer would you prefer if you do not
plan to withdraw your money in 2 years?
a. 5% simple interest per annum
b. 4% compounded interest per annum
c. 3% compounded interest semi-annually
d. 2% compounded interest quarterly
5. Which of the following statement is true about the borrower or debtor?
a. It is the amount of money borrowed or invested on the origin date.
b. It is the interest computed on the principal and also on the accumulated past
interests
,c. It refers to the person (or institution) who owes the money or avails of the fund
from the lender.
d. It refers to the person (or institution) who invests the money or makes the funds
available.
6. Which of the following statements is/are true?
I. Compound interest of a loan favors the borrower.
II. Simple interest remains constant throughout the investment term.
III. In compound interest, the interest from the previous year also earns interest.
a. I only
b. I and II
c. II and III
d. I and III
7. Which of the following formula can be used to solve for the simple interest?
a. I = Prt
b. SI = Prt/100
c. A = P(1+rt)
d. All of the above
8. It is an amount after t years that the lender receives from the borrower on the
maturity date.
a. loan date
b. maturity date
c. maturity value
d. term
9. Which of the following describes time or term?
a. It is the date on which money is received by the borrower.
b. It is the amount of time in years the money is borrowed or invested; length of time
between the origin and maturity dates
c. It is the date of which the money borrowed or loan is to be completely repaid
d. It is the amount paid or learned for the use of money.
10. In the formula, I Prt, what is r?
a. revenue
b. real value
c. repaid
d. rate of interest
, 11. It is the amount of money borrowed or invested on the origin date.
a. future value
b. principal value
c. maturity value
d. repayment value
12. A person (or institution) who invests the money or makes the funds available.
a. Lender
b. Creditor
c. Both a and b
d. None of the choices.
13. It refers to an interest that is computed based on the principal and interest
accumulated every conversion period.
a. simple
b. compound
c. annuity due
d. ordinary annuity
14. It refers to the amount after t years that the lender receives from the borrower on
the maturity date?
a. present value
b. future value
c. interest
d. ordinary annuity
15. Which of the following formula can be used to solve for the compound interest?
a. A = P(1+)
c. C = P(1+r) - 1
b. A = P(1+ )nt
d. Both a and b
SIMPLE INTEREST
CORE CONTENT
Match the terminologies in column B to its definition or statement in column A. Write
your answer on the blanks provided below the trivia question inside the box. Your
Interest, Maturity, Future, and Present Values in Simple and Compound Interests
BACKGROUND KNOWLEDGE
Choose the letter of the best answer. Write the chosen letter on a separate sheet of
paper.
1. What interest remains constant throughout the investment term?
a. simple
b. compound
c. annuity due
d. ordinary annuity
2. It is an interest computed based on the principal amount.
a. simple
b. compound
c. annuity due
d. ordinary annuity
3. What is the difference between simple and compound interest?
a. Simple yields higher interest than compound interest.
b. Simple interest has a shorter term than compound interest.
c. Simple interest is always better than compound interest.
d. Simple interest is computed based on the principal while compound interest is
computed based on the principal and also on the accumulated past interests.
4. If you would like to invest money, which bank offer would you prefer if you do not
plan to withdraw your money in 2 years?
a. 5% simple interest per annum
b. 4% compounded interest per annum
c. 3% compounded interest semi-annually
d. 2% compounded interest quarterly
5. Which of the following statement is true about the borrower or debtor?
a. It is the amount of money borrowed or invested on the origin date.
b. It is the interest computed on the principal and also on the accumulated past
interests
,c. It refers to the person (or institution) who owes the money or avails of the fund
from the lender.
d. It refers to the person (or institution) who invests the money or makes the funds
available.
6. Which of the following statements is/are true?
I. Compound interest of a loan favors the borrower.
II. Simple interest remains constant throughout the investment term.
III. In compound interest, the interest from the previous year also earns interest.
a. I only
b. I and II
c. II and III
d. I and III
7. Which of the following formula can be used to solve for the simple interest?
a. I = Prt
b. SI = Prt/100
c. A = P(1+rt)
d. All of the above
8. It is an amount after t years that the lender receives from the borrower on the
maturity date.
a. loan date
b. maturity date
c. maturity value
d. term
9. Which of the following describes time or term?
a. It is the date on which money is received by the borrower.
b. It is the amount of time in years the money is borrowed or invested; length of time
between the origin and maturity dates
c. It is the date of which the money borrowed or loan is to be completely repaid
d. It is the amount paid or learned for the use of money.
10. In the formula, I Prt, what is r?
a. revenue
b. real value
c. repaid
d. rate of interest
, 11. It is the amount of money borrowed or invested on the origin date.
a. future value
b. principal value
c. maturity value
d. repayment value
12. A person (or institution) who invests the money or makes the funds available.
a. Lender
b. Creditor
c. Both a and b
d. None of the choices.
13. It refers to an interest that is computed based on the principal and interest
accumulated every conversion period.
a. simple
b. compound
c. annuity due
d. ordinary annuity
14. It refers to the amount after t years that the lender receives from the borrower on
the maturity date?
a. present value
b. future value
c. interest
d. ordinary annuity
15. Which of the following formula can be used to solve for the compound interest?
a. A = P(1+)
c. C = P(1+r) - 1
b. A = P(1+ )nt
d. Both a and b
SIMPLE INTEREST
CORE CONTENT
Match the terminologies in column B to its definition or statement in column A. Write
your answer on the blanks provided below the trivia question inside the box. Your
