Compound interest

Front

Back

The time (in years) for which the money is invested or borrowed.

Front

In the context of compound interest, what does 'n' represent when interest is compounded semi-annually?

Back

The number of times interest is compounded per year; for semi-annual compounding, n=2.

Front

What is the formula for calculating compound interest when compounded continuously?

Back

Front

If you invest $5,000 at an interest rate of 3.75% compounded monthly for 25 years, what is the future account balance?

Back

$12,749.30.

Tags

CCSS.HSF-LE.A.1C

Front

Back

False.

Tags

CCSS.HSF-IF.C.8B

Front

What is the difference between simple interest and compound interest?

Back

Simple interest is calculated only on the principal amount, while compound interest is calculated on the principal plus any interest that has been added.

Tags

CCSS.7.RP.A.3

Front

Define compound interest.

Back

Interest calculated on the initial principal and also on the accumulated interest from previous periods.

Front

What is the formula for calculating the future value of an investment with compound interest?

Back

Front

If an investment of $1,000 earns 6.75% interest compounded semi-annually, how many times is the interest compounded in one year?

Back

2 times.

Front

What does the term 'principal' refer to in the context of compound interest?

Back

The initial amount of money invested or borrowed before interest.

Tags

CCSS.7.RP.A.3