15.2 Compound Interest

15.2 Compound Interest

by Hanna Drakos

​What is Compound Interest?

​Example

​Each end of year balance, becomes the new starting balance for the beginning of the next year.

​Complete this question into your books and then check the solution on the next slide if you got stuck.

​Solution to previous question

​Complete this question into your books and then select the correct answers on each of the next few slides.

Multiple Choice

Answer to a. 

• $480

• $330

• $390

• $420

Multiple Choice

Answer to b. 

• $12 480

• $12 330

• $15 390

• $15 420

Multiple Choice

Answer to c. 

• $12 979.20

• $11 331.80

• $15 990.01

• $14 420.30

Multiple Choice

Answer to d. 

• $13 498.37

• $11 931.80

• $15 990.01

• $14 420.30

Multiple Choice

Answer to e. 

• $1 498.37

• $1 931.80

• $1 990.01

• $1 420.30

​Complete this question into your books and then select the correct answer for c. on the next slide.

Multiple Choice

Answer to c. 

• $3.90

• $4.10

• $2.75

• $4.82

​Complete this question into your books and then select the correct answer for b. on the next slide.

Multiple Choice

Answer to b. 

• $310.08

• $254.90

• $296.07

• $376.20

​Complete this question into your books and then select the correct answers on the next few slides.

Multiple Choice

Answer to a. 

• $9600

• $7000

• $1000

• $10900

Multiple Choice

Answer to b. 

• 0.8%

• 0.9%

• 10%

• 1.4%

​How to answer c.

​Monthly rate of interest to yearly rate of interest

​= Monthly rate x 12

​= 0.8%p.month. x 12 months

​= 9.6%p.a.

Multiple Choice

Answer to d. 

• $154.21

• $318

• $265.30

• $190.40

​Complete this question into your books and then select the correct answers on the next few slides.

Fill in the Blanks

Multiple Choice

Answer to b.

• X = Nick

  Y = Adam

• X = Adam

  Y = Nick

Multiple Choice

Answer to c.

• Nick's investment is better by about $35

• Adam's investment is better by about $35