Number: Budgets, Interest and Credit
Personal budgets, simple and compound interest, the Rule of 72, banking services and the real cost of credit.
10 questions, free, marked as you go with a worked explanation on every one.
What this covers
- interest and credit
- math20 3 budgets and borrowing
The questions
- A worker deposits $2 500 in an account paying 4.5% simple interest per year. How much interest has it earned after 3 years, in dollars?
- The same $2 500 is instead invested at 4.5% compounded annually for 3 years. How much interest does it earn, in dollars, rounded to the nearest cent?
- Use the Rule of 72 to estimate how many years it takes an investment earning 6% per year, compounded annually, to double in value.
- A worker's take-home pay is $3 200 a month. Rent is $1 150, groceries $520, transport $340 and the phone bill $85. How much is left each month for savings and everything else, in dollars?
- A credit card charges 19.9% annual interest. A balance of $1 800 is carried for one month with no payment made. How much interest is added that month, in dollars?
- A payday lender charges $17 in fees to borrow $100 for 14 days. What is the equivalent annual percentage rate, rounded to the nearest whole percent?
- An account charges $1.25 for each ATM withdrawal beyond the first four in a month. A student makes 11 withdrawals in a month. What do the service charges come to, in dollars?
- Which of these is the most important practical difference between a line of credit and a credit card for someone carrying a balance?
- A credit card charges 2% interest per month on an unpaid balance of $800. How much interest is charged for that month, in dollars?
- A worker budgets $600 a month for groceries and spends $85, $92, $78 and $101 in the first four weeks. How much of the monthly budget is left for the rest of the month?