Simple and Compound Interest Review

simple and compound interest

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Multiple Choice

Starting money = $350.
Interest rate = 2.5%
TIme = 3 years.
How much interest?

• $7.50
• $26.25
• $87.5
• $262.50

Multiple Choice

Your 3 year investment of $20,000 received 5.2% interest compounded annually.  What is your total return?

• $23,285.05
• $3,285.05
• $2,385
• $32,285

Multiple Choice

The simple interest formula is I=Prt.  The P represents the principle.  The principle is ___________________.  

• the amount of money borrowed or deposited
• the percent interest for his year
• the amount taxed
• the amount the bank owes you for being a customer at their bank

Multiple Choice

Julie borrowed $3,500 for 3 years at 7½% simple interest rate. 
How much interest is that?

• Julie borrowed $3,500 for 3 years at 7½% simple interest rate. 
  How much interest is that?
• $787.50
• $810
• $812.50

Multiple Choice

The compound interest formula is:

A = P(1 + r)^t

What does the A represent?

• The amount of interest earned.

• The amount of time that has passed.

• The total amount of money after a certain amount of time.

• The amount required to invest.

Multiple Choice

Caiden earned $475 from mowing lawns last summer. He deposited this money in an account that pays an interest rate of 3.8% compounded annually. What will be his balance after 15 year?

• $827.52
• $831.10
• $839.45
• $846.80

Multiple Choice

Write the percent as a decimal. 
4.3%

• 4.3
• .43
• .043
• 4300

Multiple Choice

Find the compound interest:
Principal: $1735
Interest Rate: 0.8%
Time: 1 year

• $1,388
• $138.80
• $13.88
• None of the answers are correct.

Multiple Choice

Ann puts $300 in a bank account earning 4% interest.  How much will she earn in interest in 1 year?

• 4
• 8
• 12
• 16

Multiple Choice

What is the formula for simple interest?

• A=P(1+r)^t
• I=Prt
• I=P(1+r)t
• A=Prt

Multiple Select

What information needs to be provided to solve a problem using Simple Interest. Check all that apply.

• P= Principal

• R= Rate

• T= Time

• N= Terms in a year

• A= Total Amount

Multiple Select

What information needs to be provided to solve a problem using Compound Interest. Check all that apply.

• P= Principal

• R= Rate

• T= Time

• N= Terms in a year

• I= Interest Amount

Multiple Choice

Which is the formula for Simple Interest?

• $$I\ =\ P\cdot R\cdot T$$

• $$A=P\left(1+\frac{r}{n}\right)^{n\cdot t}$$

Multiple Choice

Which is the formula for Compound Interest?

• $$I\ =\ P\cdot R\cdot T$$

• $$A=P\left(1+\frac{r}{n}\right)^{n\cdot t}$$

Multiple Choice

Use simple interest to find the ending balance. (Total = P + I)

P= $34,100 R= 4% T= 3 years

• $4,092

• $5030

• $38,192

• $41,100

Multiple Choice

If Sam borrows $210 for 7 years at an interest rate of 8%, how much interest will he pay?

• $327.60

• $805.00

• $1015.00

• $117.60

Multiple Choice

If you borrow $4,000 for 4 years at an interest rate of 3%, how much TOTAL will you pay? ( Total= P + I )

• $480

• $48,000

• $4,480

• $8000

Multiple Choice

The A means ____________ in compound interest

• annual

• amount in account

• answer

• accrued debt

Multiple Choice

interest is _________

• extra money paid for borrowing

• interesting

• Flocabulary songs

• time times rate

Multiple Choice

6) Clay has 5 years to save money for a car. He wants to invest $800 in the bank. He has 2 banks to choose from. Wells Fargo offers a simple interest account with a rate of 4%. Chase Bank offers a compound interest annually with a rate of 4%. Which bank will provide Clay with the most money after 5 years?

• Wells Fargo

• Chase Bank