Compound/Exponential

Compound/Exponential

Assessment

Flashcard

Mathematics

9th Grade

Hard

Created by

Wayground Content

FREE Resource

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15 questions

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1.

FLASHCARD QUESTION

Front

What is compound interest?

Back

Compound interest is the interest on a loan or deposit calculated based on both the initial principal and the accumulated interest from previous periods.

2.

FLASHCARD QUESTION

Front

How is compound interest calculated annually?

Back

Compound interest is calculated using the formula A = P(1 + r/n)^(nt), where A is the amount of money accumulated after n years, P is the principal amount, r is the annual interest rate, n is the number of times that interest is compounded per year, and t is the number of years.

3.

FLASHCARD QUESTION

Front

What is continuous compounding?

Back

Continuous compounding is the process of earning interest on an investment that is calculated and added to the principal continuously, rather than at discrete intervals. The formula is A = Pe^(rt), where e is Euler's number.

4.

FLASHCARD QUESTION

Front

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

Back

The formula is A = Pe^(rt), where A is the amount of money accumulated after time t, P is the principal amount, r is the annual interest rate, and t is the time in years.

5.

FLASHCARD QUESTION

Front

If you invest $1,000 at an interest rate of 5% compounded annually for 10 years, what will be the total amount?

Back

A = 1000(1 + 0.05)^10 = $1,628.89.

6.

FLASHCARD QUESTION

Front

What does the term 'principal' refer to in finance?

Back

The principal is the initial sum of money borrowed or invested, before interest.

7.

FLASHCARD QUESTION

Front

How do you calculate the interest earned on an investment?

Back

Interest earned can be calculated by subtracting the principal from the total amount after interest is applied: Interest = A - P.

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