Exponential Function WP

Front

What does 'quarterly' mean in terms of frequency per year?

Back

Quarterly means 4 times a year.

Front

What is the formula for calculating the total amount paid on a loan with compound interest?

Back

Front

What is the difference between compound interest and simple interest?

Back

Compound interest is calculated on the initial principal and also on the accumulated interest from previous periods, while simple interest is calculated only on the principal amount.

Front

What is the equation for exponential growth?

Back

Front

If an investment of $1,500 earns 4% interest compounded monthly, how much will it be worth after 5 years?

Back

Front

What is the impact of compounding frequency on the total amount of interest earned?

Back

The more frequently interest is compounded, the more interest will be earned over time.

Front

What is the formula for calculating the future value of an investment with daily compounding?

Back

Front

What does it mean for an interest rate to be compounded quarterly?

Back

It means that the interest is calculated and added to the principal four times a year.

Front

How do you determine which investment option is better when comparing different interest rates and compounding frequencies?

Back

Calculate the future value of each investment option using the compound interest formula and compare the results.

Front

What is the effect of a higher interest rate on the total amount paid over time?

Back

A higher interest rate increases the total amount paid over time due to more interest being accrued.