Simple and Compound Interest

In some investment accounts interest is computed on interest that has been earned in previous years. What is this method of computing interest called?

• compound interest

• double interest

• simple interest

• not enough information

When calculating interest, how do you write the percent?

• a fraction

• a decimal

• a round number

• a percent

Paul deposited $5,000 in a savings account that pays 3.25% interest compounded annually. Which equation could be used to find the value of the account after 1 year?

• A = $5,000(1 + 3.25)¹

• A = $5,000 ( 1 + 0.0325) x 1

• A = $5,000(1 + 0.0325)¹

• A = $5,000(0.0325)¹

Jeriah invested $8,000 in an account that pays 4.1% interest compounded annually. What is the total interest paid at the end of 1 year?

• $8,328

• $9,312.00

• $1,394.00

• $328.00

Jeriah invested $8,000 in an account that pays 4.1% compounded annually. What is the total amount in her account after 1 year?

• $9,312.00

• $8,328.00

• $13, 940.00

• $1312.00

Fabian invests $20,000 in a savings account that pays 3.8% simple interest. If Fabian makes no withdrawals or deposits to the account, how much will be in the account after 7 years?

• $5,320.00

• $25,325.00

• $31,750.00

• Not here

Brooke deposited $500 in an account that earns 5% annual interest compounded annually. If she makes not withdrawals or deposits, how much interest will the account earn after 1 year?

• $600.00

• $607.75

• $100.00

• $25.00

Bri'andria invested $10,000 in a savings account that pays 3% simple interest. How many years will it take for the account to grow to $12,700, if she makes no withdrawals or deposits?

• 7 years

• 12 years

• 9 years

• 22 years

Jayden invests $15,000 in a savings account that pays 4.75% simple interest. If Jayden makes no withdrawals or deposits, how much will be in the account after 8 years?

• $5,700.00

• $22,700.00

• $15,000.00

• $20,700.00

Journie deposited $2,800 in a savings account that pays 2.65% interest compounded annually. What is the total value of the account after 1 year?

• $74.20

• $2,874.20

• $562.57

• $10,220.00