Simple and Compound Interest

What does A mean in the compound equation A=P(1+r)^t?

• Compound Interest

• Total amount

• Principal

• Any Interest

Which equation do I use to find the total amount for simple interest?

• I = P * r * t

• A = P(1+ r)^t

• I = A - P

• A = P + I

Cheryl is investing $25,000 into her savings account. Her simple interest rate is 6.5% for 84 months. What is the total amount she will be getting back rounded to the nearest cent?

• $11,375.00

• $38,849.66

• $36,375.00

• $113,750.00

Gerald got a loan from his bank for $9,500 at a 6% rate compounded annually for 5 years. What is the interest he has to pay back rounded to the nearest cent?

• $12,713.14

• $2,850.00

• $3,213.14

• $50,350.00

Giselle is borrowing $20,000 for a new car at 20% rate compounded annually for 48 months. What is the total amount she will have to repay for the loan rounded to the nearest cent?

• $41,472.00

• $4,147.20

• $21,648.64

• $192,000.00

Kelly is investing $5,000 into her savings at a simple interest rate of 6% for 6 years. Brian, her brother, is investing $5,000 at compounded rate of 6% for 6 years. Who is earning the most interest and by how much more rounded to the nearest cent?

• $5,292.60

• $292.60

• $7,092.60

• $345.60

If my rate is 6.7%, then it will be

• 6.7 as a decimal

• 0.67 as a decimal

• 670 as a decimal

• 0.067 as a decimal

If my time is in months, I...

• divide my months by 12 to turn it into years.

• do nothing, just plug it into the equation because it is in months.

• multiply it by my rate and principal and interest.

• multiply my months by 12 to turn it into years.

Megan is getting a loan of $4,000 to buy a nice computer, laptop, and a desk. Her simple interest rate is 4.3% for the next 7 years. What is her total amount that she will have to pay back?

• $124,400

• $16,040

• $52,040

• $5,204

Bank of America is loaning $25,000 to Jose for his new business. He has a simple interest rate of 9% for the next 180 months. How much interest will he have to pay?

• $33,750

• $3,375,000

• $91,062

• $405,000