Reference no: EM132553503

Question 1: Joe Snow requires a loan of $15,000. He enquires with three banks, Bank A, Bank B and Bank C . Bank A offers J24=6.8%; Bank B offers J2=7, and Bank C offers J1= 6.95%. Which bank should Jon get his loan from?

A. Bank A

B. Bank A and Bank B

C. Bank A

D. Bank C

Question 2: If you were given the option of investment A which pays 12% p.a simple interest for 5 years compared to investment B which pays 12% p.a compound interest also for 5 years, which of these alternatives is the better option?

A. Investment B because compound interest would accumulate a greater amount compared to simple interest.

B. Investment B because compound interest would accumulate a greater amount compared to simple interest.

C. Investment A because simple interest would accumulate a greater amount compared to compound interest.

D. Investment B because simple interest would accumulate a greater amount compared to compound interest.

Question 3: Stark is seeking to hold his $20,000 savings in a savings account for 1 year. He enquires with three banks, Bank A, Bank B and Bank C. Bank A offers J12=12%; Bank B offers J2=12.1%, and Bank C offers J4= 12.05%. Which bank should stark deposit his savings?

A. Bank B

B. Bank A

C. Bank A and Bank B

D. Bank C

Question 4: A loan of $500 is to be paid with 1 payment of $600 in 6 months. The compound interest charged per annum on the loan is:

A. 32.71% p.a

B. 3.09% p.a

C. 40.00% p.a

D. 37.02% p.a