Simple and Compound Interest Review

Front

What is Simple Interest?

Back

Front

What is Compound Interest?

Back

Front

How do you convert a percentage to a decimal?

Back

Front

What is the formula for calculating the total amount in a compound interest account?

Back

Front

If you invest $7,300 at 7% interest compounded semiannually for 3 years, what is the total return?

Back

The total return is $8,973.56.

Front

If you invest $21,000 at 13.6% interest compounded quarterly for 4 years, what is the total return?

Back

The total return is $35,854.90.

Front

Which bank will provide more money after 5 years: a simple interest account at 4% or a compound interest account at 4%?

Back

The compound interest account will provide more money.

Front

What does 'compounded quarterly' mean?

Back

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

Front

What is the principal in the context of interest calculations?

Back

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

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 accumulated interest.