Introduction to Compound Interest

Compound Interest

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​Warm up

​Example: Converting rates and time periods

​Your Turn!

​Using the compound interest formula

Multiple Choice

Calculate the value of the following investments if interest is compounded monthly: $2000 at 6% p.a. for 2 years

• $2254.32

• $2005.75

• $2123.36

• $2100.00

Multiple Choice

Calculate the value of the following investments if interest is compounded monthly: $34 000 at 24% p.a. for 4 years

• $75,000.00
• $87,960.39

• $36,802.69

• $87,556.40

Multiple Choice

Mark took a loan out for $25,690 to purchase a truck. At an interest rate of 5.2% compounded monthly, how much total will he have paid after 5 years?

• $33,299.42

• $33,672.68

• $34,157.04

• $34,710.88

Multiple Choice

Emily’s parents put $1,500 in her bank account for college tuition. At an interest rate of 8.25% compounded biannually, what will be the balance after 18 years?

• $6,273.50

• $6,314.08

• $6,385.72

• $6,427.94