Unit 2- Compound Interest Applications

Riley invested $1,000 in savings bonds. If the bonds earn 6.75% interest compounded semi-annually, how much total will Riley earn in 15 years?

• $1,584.62
• $2,651.39
• $2,706.86
• $1,825.10

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CCSS.HSF-LE.A.1C

John just opened a savings account and wants to maximize the amount of interest he earns. Which of the following actions enable him to earn MORE interest?

• selecting an account with low interest rate
• leaving his money in the account for long period of time
• transferring money into his checking account each month
• taking the money out as soon as possible

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

• $33,299.42
• $7,609.42
• $4,157.04
• $34,389.55

Kennedy won $3,000 from a radio contest. If she puts this money in a bank account that earns 2.9% interest compounded quarterly, how much interest will she earn in 10 years?

• $1,933.28
• $4,933.28
• $1,005.09
• $4,005.09

Tuition for Bubba Gump University costs $10,000 per year.  Forrest Gump would like to attend, and plans on saving for the next 2 years.  If he already has $4600 saved, what is the minimum amount needed to save per month to cover one year of tuition?

• $2700 per month
• $450 per month
• $225 per month
• $416.67 per month

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

• $6,273.50
• $6,314.08
• $6,385.72
• $6,427.94

Olivia would like to buy some new furniture for her home. She decides to buy the furniture on credit with 9.5% interest compounded quarterly. If she spent $7,400, how much total will she have paid after 8 years.

• $15,415.94
• $15,683.28
• $15,927.56
• $16,109.05

The Henley's took out a loan for $195,000 to purchase a home. At a 4.3% interest rate compounded annually, how much total interest will they have paid after 30 years?

• $412,749.79
• $494,546.99
• $689,546.99
• $640,891.79

• $93,690
• $97,644
• $103,140
• $112,647

• $21,987
• $30,789
• $32,357
• $41,189