ACP Simple & Compound interest Review

Steven is going to deposit $700 in an account that earns 4.8% interest compounded annually. His wife Linda will deposit $800 in an account that earns 7.7% simple interest each year.

They deposit the money on the same day and make no additional deposits or withdrawals from the accounts. Which account will have the most and by how much after 7 years?

• Linda by $431.20

• Steven by $540.71

• Linda by $259.29

• Steven by $331.85

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Don’s father started a college fund on Don’s 11th birthday. He deposited $3,500 into a CD (certificate of deposit) that yields an interest rate of 0.32% compounded annually. How much money will the CD be worth when Don turns 25 years old?

• $280

• $3,791.02

• $3,625.19

• $3,660.10

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Moe’s mother is planning to borrow $20,000 to remodel the restaurant she owns. She contacted several loan companies, and she is comparing two different options.

• Company 1 offers an interest rate of 6.25%.

• Company 2 offers an interest rate of 9.5%.

Both loan options involve simple interest and must be repaid in exactly 8 years. How much more will Moe’s mother pay in interest if she chooses to borrow the money from Company 2?

• $27,000

• $52,000

• $2,700

• $5,200

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Taryn’s mother is setting up a college fund account for Taryn. Taryn is 8 years old. Taryn’s mother will deposit $8,000 in a CD that earns 4% simple interest annually. How much interest will the college account earn over a 12-year period?

• $1,280

• $3,569

• $3,840

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Sonya is going to deposit $590 in an account that earns 6.3% interest compounded annually. Her husband Tommy will deposit $315 in an account that earns 7.9% simple interest each year.

They deposit the money on the same day and make no additional deposits or withdrawals from the accounts. Which account will have the most and by how much after 4 years?

• Sonya by $653.79

• Sonya by $338.79

• Tommy by $338.79

• Tommy by $653.79

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Terry’s mother is setting up a college fund account for Terry. Terry is 6 years old. Terry’s mother will deposit $9,000 in a CD that earns 3% simple interest annually. How much interest will the college account earn over a 7-year period?

• $1,890

• $1,620

• $270

• $10,890

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Brianna’s mother is planning to borrow $35,000 to remodel the restaurant she owns. She contacted several loan companies, and she is comparing two different options.

• Company 1 offers an interest rate of 4.25%.

• Company 2 offers an interest rate of 5.5%.

Both loan options involve simple interest and must be repaid in exactly 9 years. How much more will Brianna’s mother pay in interest if she chooses to borrow the money from Company 2?

• $3,937.50

• $4,287.50

• $17,325

• $17,675

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Sydney is going to deposit $990 in an account that earns 3.8% interest compounded annually. Her sister Robin will deposit $515 in an account that earns 2.2% simple interest each year.

They deposit the money on the same day and make no additional deposits or withdrawals from the accounts. Which account will have the most and by how much after 13 years?

• Robin by $173.23

• Sandy by $1,460.39

• Sandy by $945.39

• Robin by $924.29

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Mindy’s mother is planning to borrow $15,000 to remodel the restaurant she owns. She contacted several loan companies, and she is comparing two different options.

• Company 1 offers an interest rate of 2.25%.

• Company 2 offers an interest rate of 4.5%.

Both loan options involve simple interest and must be repaid in exactly 3 years. How much more will Mindy’s mother pay in interest if she chooses to borrow the money from Company 2?

• $19,237.50

• $8,1000

• $1,012.50

• $101.25

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Tania’s mother is setting up a college fund account for Tania. Tania is 7 years old. Tania’s mother will deposit $5,400 in a CD that earns 6.9% simple interest annually. How much interest will the college account earn over a 12-year period?

• $12,026.10

• $2,608.30

• $1,863.00

• $4,471.30

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