An interest rate is a special type of (1 point)
loan.
**price.
bank.
service.
2.
How does a compound interest rate differ from a simple interest rate? (1 point)
***Compound interest rates pay more interest over time.
Compound interest rates are calculated only once a year.
Compound interest rates are usually lower than simple interest rates.
Compound interest rates apply to home mortgages only.
3.
Rising demand for a certain type of car will probably lead to (1 point)
lower interest rates for all types of vehicles.
lower interest rates for that type of car.
higher interest rates for all types of vehicles.
higher interest rates for that type of car. ****
4.
Rohan has $100.00 that he wants to save in a bank. Bank A offers two types of savings accounts. One has a 5% simple interest rate, and the other has a 4.8% compound interest rate. Bank B also offers two types of savings accounts. One has a 3% simple interest rate, and the other has a 4% compound interest rate. Which account should Rohan choose in order to earn the most interest? (1 point)
Bank A simple interest account
Bank A compound interest account****
Bank B simple interest account
Bank B compound interest account
1) b
2) a
3)d
4) b
Can someone help me please? Thanks
Your answers are right.
B
A
D
B
1. An interest rate is a special type of price. To get the answer to this question, one can understand that interest is the price paid to borrow money or the return earned on an investment. Therefore, an interest rate can be seen as a special type of price because it represents the cost of borrowing money or the compensation for lending money.
2. Compound interest rates pay more interest over time. To determine how a compound interest rate differs from a simple interest rate, one can consider the difference in the calculation. Compound interest is calculated not only on the initial principal amount but also on the accumulated interest from previous periods. This leads to the growth of interest over time, resulting in higher returns compared to simple interest rates, which are calculated only on the principal amount.
3. Rising demand for a certain type of car will probably lead to higher interest rates for that type of car. To understand the impact of rising demand on interest rates for cars, one can consider the basic principles of supply and demand. When demand increases for a specific type of car, lenders may see it as an opportunity to increase interest rates for that type of car. This reflects the increased demand and the willingness of borrowers to pay higher interest rates, resulting in higher rates for that specific type of car.
4. Rohan should choose Bank A's compound interest account in order to earn the most interest. To determine the account that will earn the most interest, one can compare the interest rates offered by the different banks and types of accounts. Bank A offers a 5% simple interest rate and a 4.8% compound interest rate, while Bank B offers a 3% simple interest rate and a 4% compound interest rate. By comparing the compound interest rates of both banks, Rohan can see that Bank A's compound interest account offers a higher rate of 4.8%, which will result in earning more interest compared to the other options.