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Quick Review Flashcards - Click to flip and test your knowledge!
Question
What term describes the money borrowed from a bank or agency for a specified period?
Answer
Principal
Question
What is the extra money paid to a lender for using their money called?
Answer
Interest
Question
What is the total money paid back to a lender at the end of a specified period called?
Answer
Amount
Question
State the fundamental formula for calculating the total Amount ($A$) using Principal ($P$) and Interest ($I$).
Answer
$A = P + I$
Question
Interest that is calculated on the original principal throughout the entire loan period is known as _____ interest.
Answer
Simple
Question
What is the mathematical formula for Simple Interest ($I$)?
Answer
$I = \frac{P \times R \times T}{100}$
Question
If a financial problem mentions 'interest' without any further description, which type of interest is always implied?
Answer
Simple Interest
Question
In Compound Interest, what happens to the interest due at the end of a fixed period?
Answer
It is added to the principal to form the new principal for the next period.
Question
How is the total Compound Interest ($C.I.$) determined using the final amount and the original principal?
Answer
$C.I. = \text{Final Amount} - \text{Original Principal}$
Question
For the first year of a loan, how does Compound Interest compare to Simple Interest given the same principal and rate?
Answer
They are equal ($C.I. = S.I.$)
Question
From the second year onwards, why is Compound Interest higher than Simple Interest for the same sum and rate?
Answer
Because the interest is calculated on a principal that grows each year.
Question
What is the specific name for the time interval after which interest is added to the principal and the principal changes?
Answer
Conversion period
Question
If interest is compounded half-yearly, what is the length of the conversion period?
Answer
Six months
Question
In Compound Interest calculations, the amount at the end of the first year becomes the _____ for the second year.
Answer
Principal
Question
Calculate the Simple Interest on ₹ $1,000$ at $10\%$ per annum for 3 years.
Answer
₹ $300$
Question
If the Compound Interest for the 1st, 2nd, and 3rd years are ₹ $100$, ₹ $110$, and ₹ $121$ respectively, what is the total $C.I.$ for 3 years?
Answer
₹ $331$
Question
When interest is compounded half-yearly, what value for Time ($T$) is used to calculate interest for each conversion period?
Answer
$T = \frac{1}{2}$ year
Question
If ₹ $8,000$ is lent at $5\%$ compound interest for 2 years, what is the interest for the first year?
Answer
₹ $400$
Question
What is the amount at the end of the first year for ₹ $8,000$ at $5\%$ compound interest?
Answer
₹ $8,400$
Question
Calculate the interest for the second year if the principal at the start of that year is ₹ $8,400$ and the rate is $5\%$.
Answer
₹ $420$
Question
What is the total Compound Interest on ₹ $16,000$ in 3 years if the successive annual rates are $10\%$, $12\%$, and $15\%$?
Answer
₹ $6,668.80$
Question
To calculate C.I. for $2 \frac{1}{2}$ years compounded annually, what time value is used for the interest calculation of the final period?
Answer
$T = \frac{1}{2}$ year
Question
Find the difference between C.I. and S.I. on ₹ $4,000$ at $8\%$ per annum for 2 years.
Answer
₹ $25.60$
Question
What is the formula for finding the Rate of interest ($R$) when the C.I. of two consecutive periods is known?
Answer
$R = \frac{\text{Difference in C.I.} \times 100}{\text{C.I. of preceding period} \times \text{Time}}$
Question
What is the formula for finding the Rate of interest ($R$) when the Amounts ($A$) of two consecutive periods are known?
Answer
$R = \frac{\text{Difference in Amounts} \times 100}{\text{Preceding Amount} \times \text{Time}}$
Question
Term: Depreciation
Answer
Definition: The reduction in the value of an asset (like a machine) over time due to use or age.
Question
How is the value of a machine at the beginning of the second year calculated if it depreciates by $10\%$ in the first year?
Answer
$\text{Original Cost} - (10\% \text{ of Original Cost})$
Question
In a repayment problem, if a borrower pays back ₹ $2,500$ at the end of the first year, how is the principal for the second year determined?
Answer
$\text{Amount at the end of 1st year} - ₹ 2,500$
Question
If the Simple Interest on a sum for 3 years is ₹ $600$, what is the Simple Interest for just the first year?
Answer
₹ $200$
Question
For any conversion period after the first, why is the Compound Interest always more than the C.I. of the previous period?
Answer
Because the interest is calculated on a principal that has increased by the previous period's interest.
Question
If the C.I. of the 1st year is $x$, what is the C.I. for the 2nd year at rate $r\%$?
Answer
$x + (r\% \text{ of } x)$
Question
The difference between the compound interests for any two consecutive conversion periods is the interest on the _____ of the preceding period.
Answer
Interest
Question
The difference between the amounts of any two consecutive conversion periods is the interest on the _____ of the preceding period.
Answer
Amount
Question
If an asset worth ₹ $100$ depreciates by $10\%$ in the first year and $10\%$ of the remaining value in the second year, what is its value after 2 years?
Answer
₹ $81$
Question
If interest is compounded half-yearly, how many conversion periods are there in 1.5 years?
Answer
Three
Question
Find the interest on ₹ $10,000$ for $\frac{1}{2}$ year at $8\%$ per annum.
Answer
₹ $400$
Question
If the amount after 2 years at C.I. is ₹ $6,272$ and after 3 years is ₹ $7,024.64$, what is the interest for the 3rd year?
Answer
₹ $752.64$
Question
In Example 9, what assumed principal ($P$) is used to solve the problem by the unitary method?
Answer
₹ $100$
Question
If a machine depreciates by $10\%$ per annum and the depreciation during the second year is ₹ $9$, what was the value at the start of the second year?
Answer
₹ $90$
Question
If the amount at the end of the 2nd year is ₹ $13,860$ and an additional ₹ $6,000$ is invested at the start of the 3rd year, what is the principal for the 3rd year?
Answer
₹ $19,860$
Question
Find the interest on ₹ $6,000$ for 1 year at $10\%$ per annum.
Answer
₹ $600$
Question
If a sum grows to ₹ $22,400$ after 1 year and ₹ $8,400$ is repaid, what is the new principal for the 2nd year?
Answer
₹ $14,000$
Question
Find the interest on ₹ $5,900$ for $\frac{1}{2}$ year at $10\%$ per annum.
Answer
₹ $295$
Question
If the difference between C.I. of the 1st and 3rd year is ₹ $0.5125$ for a principal of ₹ $100$, what is the principal for a difference of ₹ $61.50$?
Answer
₹ $12,000$
Question
What is the Simple Interest on ₹ $46,875$ at $4\%$ for 1 year?
Answer
₹ $1,875$
Question
If the C.I. for two successive years is ₹ $2,700$ and ₹ $2,880$, calculate the rate of interest.
Answer
$6 \frac{2}{3} \%$
Question
How does the Simple Interest on a fixed sum at a constant rate change over multiple years?
Answer
It remains the same every year.
Question
If the S.I. for 3 years is ₹ $600$ and the C.I. for 2 years is ₹ $410$ on the same sum and rate, what is the interest for the 1st year?
Answer
₹ $200$ (for both S.I. and C.I.)
Question
In half-yearly compounding at $10\%$ p.a., what is the interest on ₹ $8,000$ for the first six months?
Answer
₹ $400$
Question
If a machine depreciates by $15\%$ of its value each year, and its initial value is ₹ $V$, what is the depreciation amount in the first year?
Answer
$0.15 V$
Question
If the principal for the 2nd year is ₹ $14,000$ and the rate is $12\%$, what is the interest for the 2nd year?
Answer
₹ $1,680$
Question
Calculate the amount for the 3rd year if the principal is ₹ $19,712$ and the rate is $15\%$.
Answer
₹ $22,668.80$
Question
What is the C.I. for the 3rd year in Problem 19 if the interest for the 2nd year is ₹ $1,056$ and the rate is $10\%$?
Answer
₹ $1,161.60$
Question
If the C.I. for the 5th year is ₹ $665.50$ and the rate is $10\%$, what is the C.I. for the 6th year?
Answer
₹ $732.05$
Question
In Example 18, if the amount in 5 years is ₹ $8,100$ and in 6 years is ₹ $8,748$, what is the interest for the 6th year?
Answer
₹ $648$
Question
What is the rate percent in Example 18 if the interest is ₹ $648$ on a sum of ₹ $8,100$?
Answer
$8\%$
Question
If a machine's original cost is ₹ $100$ and it depreciates by $10\%$ annually, what is its value at the beginning of the 3rd year?
Answer
₹ $81$
Question
For ₹ $6,000$ at $10\%$ C.I., find the interest for the second year.
Answer
₹ $660$
Question
If the principal at the start of the final half-year is ₹ $7,260$ and the rate is $10\%$, what is the interest for that half-year?
Answer
₹ $363$
Question
In Example 11, find the interest for the 3rd year on ₹ $50,700$ at $4\%$.
Answer
₹ $2,028$