Interest Rates Quiz

Ten Interest Rates practice questions cover calculations and concepts. Every answer is explained.

Free, with no sign-up.

For High school students and adults reviewing the topic.

About 14 minutes. 10 questions.

How does it work?

Choose one answer or enter a number in the stated unit, then check it.
Round only the final answer to the precision requested.

What will you get?

Review a score and an explanation for every answer.

Question 1An illustrative $1350 principal earns 4% simple annual interest for 3 years. Find interest earned in dollars, rounded to two decimals.

Enter a number in dollars.

Answers within 0.005 dollars of the expected value are accepted.

Question 2An initial $760 balance earns a fixed nominal annual rate of 6%, compounded quarterly for 2 years. Find the final balance in dollars, rounded to two decimals.

Enter a number in dollars.

Answers within 0.005 dollars of the expected value are accepted.

Question 3An account earns an effective annual money return of 7% while annual inflation is 2%. Find the exact real annual rate in percent, rounded to two decimals.

Enter a number in %.

Answers within 0.005 % of the expected value are accepted.

Question 4For a deposit, the nominal annual rate is 9%, compounded monthly. With no fees, find APY in percent, rounded to two decimals.

Enter a number in %.

Answers within 0.005 % of the expected value are accepted.

Question 5Two loan offers have similar quoted rates but different required fees. What information supports a cost comparison?

The posted rate applied to the lender’s own fundingThe advertised percentage before mandatory feesThe smallest installment independently of the repayment termThe amounts received and paid at their scheduled dates

Question 6A borrower offers reliable collateral under a loan contract. Why might this affect the offered rate?

It changes the lender’s expected loss if repayment failsIt changes the borrower’s debt into ownership in the lenderIt fixes the economy’s policy rate for the contract’s termIt removes the lender’s funding and operating costs

Question 7Following a policy-rate change, lenders alter their retail offers by different amounts. Why is this possible?

Retail lending operates independently of funding marketsFunding conditions pass through contracts and competitionThe central bank assigns one retail quote to each customerA policy announcement fixes borrowers’ individual default outcomes

Question 8A variable loan rate is defined by a benchmark plus a margin. What should a borrower examine about future changes?

The reset schedule and the contract’s caps or floorsThe opening rate unchanged until the loan is repaidA rate linked to the lender’s number of issued sharesRepayment dates supplied by the benchmark’s title

Question 9When a rate increases from 2% to 3%, which interpretation separates percentage points from relative change?

A two-point decrease caused by subtracting in reverseA one-percent relative increase in the former rateA three-point increase equal to the new quoted rateA one-point increase that is half the original rate

Question 10A savings offer pays interest but charges a recurring maintenance fee. What determines the money gain before tax?

The deposit returned at closing as the interest earnedThe annual percentage added directly to the dollar balanceThe credited amount after deducting recurring chargesThe fee added to interest because both appear on the statement

Answer every question to see and share your score.

Read the topic guide