Compound Interest Flashcard

Front

In the compound interest formula A=P(1+r)^t, what does the A stand for?

Back

The total amount

Front

In the compound interest formula A=P(1+r)^t, what does the P stand for?

Back

The principal amount (original amount)

Front

Jacob borrows $500 from Abraham and agrees to have the loan compounded annually for 5 years with an interest rate of 2.5%. How much will the total amount be that Jacob owes?

Back

$565.70

Front

Henry deposits $750 into a college savings account that is compounded annually at an 8.5% interest rate. How much money will he have total after 5 years?

Back

$1127.74

Front

What do you do to find the interest earned after compounding annually using A=P(1+r)^t?

Back

Subtract P (original amount) from A (total amount)

Front

Equation to find the value of a $5,000 savings account with 4% interest compounded annually after 3 years.

Back

A = 5,000(1 + 0.04)³

Front

What does the n stand for in this formula?

Back

The number of times compounded per year

Front

Which of the following exponential equations is the formula for compound interest? Options: A, B, C, D

Back

Front

What does the r stand for in this formula? Options: Initial amount, Final amount, Rate, Time, The number of times compounded per year

Back

Rate

Front

Jenny invests $7,530 in a savings account with a fixed annual interest rate compounded continuously. After 8 years, the balance reaches $12,169.04. What is the interest rate of the account?

Back

6%