FINAL REVIEW 2

FINAL REVIEW 2

COMPOUND INTEREST

Compound interest is when your principle and any earned interest both earn interest.

Multiple Choice

Find the future value of $500 invested at 12% for 10 years compounded annually.

• $1,052.92

• $1,552.92

• $10,529.20

• $15,529.20

Multiple Select

What is the BEST way to find the total interest earned on a compounding interest account? Choose all that apply

• I = Prt

• I = A - P

• There is no way to separate the interest from the future value

• There is no formula for interest for a compounding interest account, but it can be figured out using logic

Multiple Choice

What is the total interest earned on an account with an initial deposit of $500 invested at 12% for 10 years?

• $552.92

• $1,052.92

• $1,552.92

Multiple Choice

Craig deposits $5,000 at 5.12% interest, compounded continuously for four years. What would his ending balance be to the nearest cent?

• $613.40

• $6,136.40

• $61,364

• $613,640

Multiple Choice

How much interest did Craig earn on his account in four years?

• $136.40

• $1,136.40

• $11,364

• $113,640

THANK YOU!