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Exchange rates and compound interest
Dynamic tasks on currency conversion, rate comparison, compound interest, loan fees and financial offers.
Questions: 10Estimated time: 24 minutes
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Question 1out of 10
When exchanging €50 for dollars, offer A gives 1.20 USD per euro and offer B gives 1.26. Which gives more dollars?
When the rate is USD per euro, multiply euros by the rate to obtain dollars. Divide dollars by the rate to obtain euros. For the same euro amount without fees, the larger USD/Eur rate gives more dollars.
Question 2out of 10
Which statement correctly explains how compound interest works?
Compound interest is calculated on the current balance each period, including earlier interest. Final amount = initial deposit × (1 + p/100)ⁿ. With a positive rate and more than one period, this exceeds the amount from simple interest.
Question 3out of 10
€1 = 1.21 USD. How many US dollars will you receive for €160?
When the rate is USD per euro, multiply euros by the rate to obtain dollars. Divide dollars by the rate to obtain euros. For the same euro amount without fees, the larger USD/Eur rate gives more dollars.
Question 4out of 10
When exchanging €140 for dollars, offer A gives 1.28 USD per euro and offer B gives 1.33. Which gives more dollars?
When the rate is USD per euro, multiply euros by the rate to obtain dollars. Divide dollars by the rate to obtain euros. For the same euro amount without fees, the larger USD/Eur rate gives more dollars.
Question 5out of 10
A deposit of 2000 € earns 20% compound interest annually for 2 years. What is the final amount?
Compound interest is calculated on the current balance each period, including earlier interest. Final amount = initial deposit × (1 + p/100)ⁿ. With a positive rate and more than one period, this exceeds the amount from simple interest.
Question 6out of 10
A loan of 2000 € is offered. A: 6% interest plus a fee of 40 €. B: 9% with no fee. Which is cheaper?
One-year total repayment = loan + loan × p/100 + fee. Compare both total repayments; a lower interest rate does not necessarily mean a lower total cost.
Question 7out of 10
€1 = 1.25 USD. How many euros are needed to receive $137.50?
When the rate is USD per euro, multiply euros by the rate to obtain dollars. Divide dollars by the rate to obtain euros. For the same euro amount without fees, the larger USD/Eur rate gives more dollars.
Question 8out of 10
The same amount is invested for 5 years at 5% simple or compound interest. Which statement is correct?
Compound interest is calculated on the current balance each period, including earlier interest. Final amount = initial deposit × (1 + p/100)ⁿ. With a positive rate and more than one period, this exceeds the amount from simple interest.
Question 9out of 10
A loan of 1000 € is taken for one year at 8% interest with an additional fee of 70 €. What is the total repayment?
One-year total repayment = loan + loan × p/100 + fee. Compare both total repayments; a lower interest rate does not necessarily mean a lower total cost.
Question 10out of 10
A loan of 900 € is offered. A: 4% interest plus a fee of 20 €. B: 5% with no fee. Which is cheaper?
One-year total repayment = loan + loan × p/100 + fee. Compare both total repayments; a lower interest rate does not necessarily mean a lower total cost.
Time left: 00:00:00
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Sample questions
- €1 = ___ USD. How many US dollars will you receive for €___?
- €1 = ___ USD. How many euros are needed to receive $___?
- When exchanging €___ for dollars, offer A gives ___ USD per euro and offer B gives ___. Which gives more dollars?
- A deposit of ___ earns ___% compound interest annually for ___ years. What is the final amount?
- The same amount is invested for ___ years at ___% simple or compound interest. Which statement is correct?
Exchange rates and compound interest
An exchange rate states how many units of one currency correspond to one unit of another. Before multiplying or dividing, read the direction of the rate and check which currency the answer requires. A bank fee changes the amount actually received.
Compound growth
With compound interest, each period earns interest on the accumulated amount: A = P(1 + r)ⁿ. When comparing offers, include the time period, percentage rate and all fees. Round money to cents only at the end of the calculation.
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