Numerical Reasoning Financial Numeracy 1

Question 1

An investment of $5,000 earns simple interest at 6% per year. What is the total value after 3 years?

Accepted Answer

$5,900

Answer

Simple interest = P × r × t = $5,000 × 0.06 × 3 = $900; total = $5,000 + $900 = $5,900.

Question 2

A retailer buys goods for $840 and sells them for $1,050. What is the profit margin as a percentage of selling price?

Accepted Answer

20%

Answer

Profit = $1,050 − $840 = $210; profit margin = ($210 ÷ $1,050) × 100 = 20%.

Question 3

A loan of $12,000 is taken at 8% annual interest for 2 years. What is the total amount repaid using simple interest?

Accepted Answer

$13,920

Answer

Interest = $12,000 × 0.08 × 2 = $1,920; total repayment = $12,000 + $1,920 = $13,920.

Question 4

A company earns $320,000 revenue with $240,000 in costs. What is the gross profit percentage?

Accepted Answer

25%

Answer

Gross profit = $320,000 − $240,000 = $80,000; GP% = ($80,000 ÷ $320,000) × 100 = 25%.

Question 5

A bank account pays 4% annual interest compounded annually. If you deposit $2,000, how much is in the account after 2 years?

Accepted Answer

$2,163.20

Answer

Year 1: $2,000 × 1.04 = $2,080; Year 2: $2,080 × 1.04 = $2,163.20.

Numerical Reasoning Practice Test