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UCE (O-Level) Finance and growth — practice questions

Explore 5 free Finance and growth questions in UCE (O-Level) Mathematics. Open each question or exercise to read its content, reference answers and available explanation.

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Finance and growth questions and exercises with answers

Showing questions 1–5 of 5.

Simple interest is worked out on which amount?Read the answer and worked solution →What makes compound interest different from simple interest?Read the answer and worked solution →Two investments are plotted against time on the same axes. Which one gives a straight line graph?Read the answer and worked solution →Which formula is used to work out the repayments on a hire purchase agreement?Read the answer and worked solution →Which pair of quantities is worked out using the compound interest formula?Read the answer and worked solution →

Worked practice questions

Simple interest is worked out on which amount?

  1. Only the amount invested
  2. The interest earned only
  3. The interest and the rate
  4. The number of years only
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Correct answer: A. Only the amount invested

1. Interest is the money charged for borrowing money, or earned for lending it. 2. Simple interest is interest calculated only on the initial amount that you invested. 3. That opening balance is called the principal in financial calculations. 4. Interest already earned is never added to the principal under simple interest. _Source: Siyavula Mathematics Grade 10 (Everything Maths, CC BY 4.0), Chapter 9: Finance and growth_

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What makes compound interest different from simple interest?

  1. It earns no interest at all
  2. It earns interest on interest
  3. It ignores the time period
  4. It always uses a fixed sum
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Correct answer: B. It earns interest on interest

1. Under simple interest only the original investment ever earns interest. 2. Compound interest is the interest earned on the principal amount and on its accumulated interest. 3. Each year's closing balance therefore becomes the opening balance for the next year. 4. This is good news for an investor but bad news for anyone repaying a loan. _Source: Siyavula Mathematics Grade 10 (Everything Maths, CC BY 4.0), Chapter 9: Finance and growth_

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Two investments are plotted against time on the same axes. Which one gives a straight line graph?

  1. Compound interest growth
  2. Population growth
  3. Simple interest growth
  4. Price inflation growth
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Correct answer: C. Simple interest growth

1. Simple interest adds the same amount of interest in every year. 2. Adding a constant amount each year produces a straight line graph. 3. Compound interest adds a growing amount each year and produces an exponential graph. 4. Population growth and inflation both follow the compound pattern, so neither of those plots as a straight line. _Source: Siyavula Mathematics Grade 10 (Everything Maths, CC BY 4.0), Chapter 9: Finance and growth_

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