Simple & Compound Interest

Front

The Principle in the simple interest formula

Back

the amount of money borrowed or deposited

Front

To earn as much interest as possible, you should open a savings account that earns ______ interest and has the _____ interest rate.

Back

compound ; highest

Front

How to convert time in months to years for simple interest calculation?

Back

Divide the months by 12.

Front

Joe places $4000 in a bank for 2 years. The bank offers an interest of 4% per annum compounded yearly. What are the values I would use to compute the total amount Joe will get after 2 years? Options: P = $4000, r = 1%, n = 2; P = $4000, r = 4%, n = 1; P = $4000, r = 4%, n = 2; P = $4000, r = 2%, n = 4

Back

P = $4000 r = 4% n = 2

Front

Ann puts $300 in a bank account earning 4% per annum simple interest. How much interest will she earn in 1 year?

Back

12

Front

What does P stand for in the simple interest formula?

Back

principal

Front

Joyce wants to maximize interest on her savings account. What actions will enable her to earn more interest? Options: selecting an account with a higher interest rate, leaving her money in the account for a long period of time, transferring money into her checking account each month, higher interest rate AND leaving money in for a longer time.

Back

higher interest rate AND leaving money in for a longer time

Front

What is important about how T is calculated in the simple interest formula?

Back

It must be in years.

Front

Values to compute total amount for $5000 at 3% per annum compounded half-yearly for 3 years?

Back

P = $5000, r = 1.5, n = 6

Front

In the Compound Interest formula shown, what does M represent?

Back

M = Principal sum + interest