STAAR REVIEW 8th GRADE: Simple and Compound Interest

Anne deposited $500 in an

account that earns 6% simple annual interest.

Shelly deposited $500 in an account that earns 6% annual interest

compounded annually. They leave the

money in the account for 4 years. Which

statement is true about the two investments after 4 years?

• Shelly will have $131.24 more in her account

  than Anne has in her account.

• They will have the same

  amount in their accounts.

• Shelly will have $11.24 more

  in her account than Anne has in her account.

• Anne will have $11.24 more in

  her account than Shelly has in her account.

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Carly

deposited $800 in an account that earns 6% compounded annually. Lara deposited

$800 in an account that earns 6% simple interest. How much will each girl have

in their account at the end of 10 years if they make no withdrawals or deposits?

• Carly: $1432.68 Lara: $1280

• Carly: $1444.89 Lara: $1280

• Carly: $1444.89 Lara: $1320

• Carly: $1432.68 Lara: $1320

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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

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When calculating

interest, how do you write the percent?

• a fraction

• a decimal

• a round number

• not enough information

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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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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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David

invests $10,000 in a savings account that pays 3.5% simple interest. If David

makes no withdrawals or deposits to the account, how much will be in the

account after 7 years.

• $2,450

• $11,750

• $12,450

• Not here

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Garrison

deposited $500 in an account that earns 5% annual interest compounded annually. If he makes no withdrawals or deposits, how

much interest will the account earn after 4 years?

• $600

• $100

• $607.75

• $107.75

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Jared

invests $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 he makes no withdrawals or deposits?

• 7 years

• 12 years

• 9 years

• 22 years

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Gilberto

invests $10,000 in a savings account that pays 4.75% simple interest. If Gilberto makes no withdrawals or deposits

to the account, how much will be in the account after 7 years?

• $3,325

• $13,325

• $13,838.16

• $13,000

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