Front

What is the decimal equivalent of 6.75%?

Back

.0675

Front

If Karla invests $1,000 at 6.75% interest compounded semi-annually for 15 years, how much will she have?

Back

$2,706.86

Front

What is the total amount Emily will pay for furniture costing $7,400 at 9.5% interest compounded quarterly after 8 years?

Back

$15,683.28

Front

How many times a year does monthly compounding occur?

Back

12

Front

If Courtney saves $2,200 at 5.2% interest compounded daily for 4 years, what will be the total amount in her account?

Back

$2,708.63

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 compound interest?

Back

A = P(1 + r/n)^(nt) where A is the amount, P is the principal, r is the annual interest rate, n is the number of times interest is compounded per year, and t is the number of years.

Front

What does 'compounded semi-annually' mean?

Back

Interest is calculated and added to the principal twice a year.

Front

What does 'compounded quarterly' mean?

Back

Interest is calculated and added to the principal four times a year.

Front

What is the difference between simple interest and compound interest?

Back

Simple interest is calculated only on the principal, while compound interest is calculated on the principal plus any accumulated interest.