Compound Interest

Steve deposited

$5,000 in a savings account that pays 4% interest compounded annually. Which

equation could be used to find the value of the account after 3 years?

• A = 5,000(1 + 4)³

• A = 5,000(1 + 0.04)³

• A = 5,000(1 + 0.4) x 3

• A = 5,000(0.04)³

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Your 3 year investment of $20,000 received 5.2% interest compounded annually.  What is your total return?

• $23,285.05
• $3,285.05
• $2,385
• $32,285

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You borrowed $59,000 for 2 years at 11% which was compounded annually.  What total will you pay back?

• $13,693.90
• $1,363.90
• $72,693.90
• $73,793.90

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Your 6 year investment of $40,000 at 14% interest compounded annually is worth how much now?

• $47,798.90
• $87,798.90
• $127,798
• $7,798

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Your $440 gets 5.8% interest compounded annually for 8 years. What will your $440 be worth in 8 years?

• $250.78

• $690.78

• $1,130

• $940.78

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

• $412,749.79
• $529.305.61
• $689,546.99
• $640,891.53

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Caiden earned $475 from mowing lawns last summer.He deposited this money in an account that pays an interest rate of 3.8% compounded annually. What will be his balance after 15 years?

• $827.52                     (Mr. Williams)       
• $831.10                 (Mrs. Hoch)
• $839.45                    (Mr. Krajunus)
• $846.80                   (Ms. Palombo)

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Heather

invested $8,000 in a 4-year Certificate of Deposit (CD) that pays 4.1% interest

compounded annually. What is the value of the CD at the end

of the 4 years?

• $9,394.92

• $9,312.00

• $1394.00

• $1312.00

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You invested $1,900 at 4% interest compounded annually for 3 years.  How much interest did you earn in 3 years?

• $2,372.40
• $237.24
• $2,137.24
• $3,197.60

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You take out a loan for $175,000. Which option will cost you less?

A) Simple Interest rate of 4.17% over 15 years

B) Compound Interest rate of 3.5% over 15 years

• Option A

• Option B

• they are both equal

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