Calculating Compound & Continuous Interest

Calculating Compound & Continuous Interest

Assessment

Flashcard

Mathematics

9th - 12th Grade

Practice Problem

Hard

CCSS
HSF.LE.A.4, 7.RP.A.3, HSF.BF.A.2

Standards-aligned

Created by

Wayground Content

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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.

Tags

CCSS.7.RP.A.3

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 interest?

Back

Continuous interest is calculated using the formula 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 e is Euler's number (approximately 2.71828).

4.

FLASHCARD QUESTION

Front

What is the formula for calculating compound interest?

Back

The formula for calculating compound interest is A = P(1 + r/n)^(nt).

5.

FLASHCARD QUESTION

Front

What does 'compounded quarterly' mean?

Back

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

6.

FLASHCARD QUESTION

Front

If you invest $1,000 at an interest rate of 5% compounded annually, how much will you have after 3 years?

Back

Using the formula A = P(1 + r/n)^(nt), A = 1000(1 + 0.05/1)^(1*3) = $1,157.63.

7.

FLASHCARD QUESTION

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.

Tags

CCSS.HSF.BF.A.2

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