Answer Key – Business Math

1. D
2. C
3. B
4. A
5. B
6. A
7. C
8. A
9. B
10. D
11. B
12. A
13. D
14. C
15. D
Solve with solution:
Find the interest:
1. A bank offers 0.25% annual simple interest rate for a particular deposit. How much
interest will be earned if 1 million pesos is deposited in this savings account for 1
year?
Given: P=1,000 I=0.25% = 0.0025 t=1 year
Is=Prt
Is= (1,000,000)(0.0025)(1)
Is=2,500
Find the amount invested or principal:
2. When invested at an annual interest rate of 7%, the amount earned 11,200 of
simple interest in two years. How much money was originally invested?
Given: r=7% = 0.07 t=2 years Is=11,200
P= Is
rt

P= 11,200
(0.07)(2)

P=80,000
Find the rate:
3. If an entrepreneur applies for a loan amounting to 500,000 in a bank, the simple
interest of which is 157, 500 for 3 years, what interest rate is being charged?
Given: P=500,000 Is=157,500 t=3 years
r=Is
Pt

r= 157,500
(500,000)(3)

r= 0.105=10.5%

Find the future Value of general annuity:

4. John deposited ₱2,000 monthly in the bank that pays 5% compounded annually.
How much will be in his bank account after 4 years?

Find the present Value of general annuity:

5. Lorie borrowed money from Jude. She agrees to pay the principal plus interest by
paying ₱17,000 each year for 8 years. How much money did she borrowed if the
interest is 5% compounded semi-annually?