Numerical Reasoning Financial Numeracy 1 — Questions and Answers
Question 1: An investment of $5,000 earns simple interest at 6% per year. What is the total value after 3 years?
- $5,900 (Correct answer)
- $6,000
- $5,800
- $6,300
Correct answer: $5,900
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?
- 20% (Correct answer)
- 25%
- 15%
- 18%
Correct answer: 20%
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?
- $13,920 (Correct answer)
- $14,400
- $13,200
- $12,960
Correct answer: $13,920
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?
- 25% (Correct answer)
- 33%
- 20%
- 30%
Correct answer: 25%
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?
- $2,163.20 (Correct answer)
- $2,160.00
- $2,080.00
- $2,200.00
Correct answer: $2,163.20
Year 1: $2,000 × 1.04 = $2,080; Year 2: $2,080 × 1.04 = $2,163.20.
Question 6: A salesperson earns a base salary of $2,500 per month plus 4% commission on sales. If monthly sales total $18,000, what is the total monthly income?
- $3,220 (Correct answer)
- $3,000
- $3,120
- $3,500
Correct answer: $3,220
Commission = 0.04 × $18,000 = $720; total income = $2,500 + $720 = $3,220.
Numerical Reasoning Financial Numeracy 1
An investment of $5,000 earns simple interest at 6% per year.
What is the total value after 3 years?