Compare Interest

Front

What is the formula to convert months to years?

Back

To convert months to years, divide the number of months by 12.

Front

How many years are in 60 months?

Back

5 years.

Front

What is the value of a Certificate of Deposit (CD) after 4 years if $8,000 is invested at 4.1% interest compounded annually?

Back

$9,394.92.

Front

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

Back

A = P(1 + r)^t, where A is the amount, P is the principal, r is the interest rate, and t is the time in years.

Front

How do you convert a percentage to a decimal for interest calculations?

Back

Divide the percentage by 100.

Front

How many years are in 18 months?

Back

1.5 years.

Front

What is the interest earned on a $5,000 deposit at 4% interest compounded annually after 3 years?

Back

Use the formula A = 5,000(1 + 0.04)^3.

Front

What does 'compounded annually' mean?

Back

Interest is calculated once a year on the principal amount.

Front

If an investment earns 5% interest compounded annually, how would you express this as a decimal?

Back

0.05.

Front

What is the principal amount in the context of interest calculations?

Back

The principal amount is the initial sum of money invested or loaned.