Applied Math Finale Review 2025

Front

What is the formula to calculate compound interest?

Back

A = P(1 + r/n)^(nt) where A is the amount of money accumulated after n years, including interest. P is the principal amount, r is the annual interest rate (decimal), n is the number of times that interest is compounded per year, and t is the number of years the money is invested or borrowed.

Front

What does it mean to deposit money into a bank account?

Back

A deposit is a transaction that adds funds to a bank account, increasing the account balance.

Front

Why is a high interest rate desirable for savings?

Back

A high interest rate means that your savings will grow faster over time, leading to more money earned on your initial investment.

Front

What is a budget surplus?

Back

A budget surplus occurs when actual income exceeds planned income, indicating extra funds available.

Front

What is a budget deficit?

Back

A budget deficit occurs when actual income is less than planned income, indicating a shortfall.

Front

How can you avoid paying interest on a credit card?

Back

By paying off the full balance on time each month, you can avoid interest charges.

Front

What is the principal in a loan or investment?

Back

The principal is the original sum of money borrowed or invested, excluding any interest or dividends.

Front

What is the effect of compounding frequency on interest earned?

Back

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

Front

What is the difference between a deposit and a withdrawal?

Back

A deposit adds money to an account, while a withdrawal takes money out of an account.

Front

What is the significance of the annual percentage rate (APR)?

Back

APR represents the annual cost of borrowing or the annual return on an investment, expressed as a percentage.