SIMPLE & COMPOUND INTEREST

1) Gabby invested $100 into a savings account that earned simple interest at a rate of 1.5%.  She plans to keep the money in the account for the next ten years.  How much would she have in the account at the end of ten years?

• $15
• $115       
• $116.05
• $1,500

Tags

CCSS.HSF.BF.A.2

2) Jacob invested $400 into a savings account that earned simple interest at a rate of 1.25%.  He plans to keep it in the account for the next 10 years.  How much interest would he gain in the account after 10 years?

• $50
• $450       
• $500       
• $5,000

Tags

CCSS.HSF.BF.A.2

4)  Rosa invests her tax return check into an account with a compounded interest rate of 1 3/4 %.  She plans on keeping the account open for 12 years.  If she has $1600.87 in her account at the end of 12 years, approximately how much was her initial investment?

• $1,300
• $1,970
• $7,690
• $11,000

Tags

TEKS.MATH.2A.5B

TEKS.MATH.A.9C

6)  Clay has 5 years to save money for a car.  He wants to invest $800 in the bank.  He has 2 banks to choose from. Wells Fargo offers a simple interest account with a rate of 4%.  Chase Bank offers a compound interest account with a rate of 4%. Which bank will provide Clay with the most money after 5 years?

• Wells Fargo
• Chase Bank

Tags

TEKS.MATH.2A.5B

TEKS.MATH.A.9C

7)  Rosalinda wants to save money for college.  She wants to invest $1000 with the bank that will maximize her savings.  She finds out that both Washington Mutual and Compass Bank offer accounts that pay at a rate of 3%.  However, Washington Mutual offers a simple interest account with a maximum time period of 4 years while Compass Bank offers a compound interest account with a maximum time period of 3 years.  What is the difference in the amount of interest each account pays?

• $27.28
• $92.72
• $120       
• $972.72

Tags

TEKS.MATH.2A.5B

TEKS.MATH.A.9C

8)  Jose wants to save money for a house and finds two accounts that pay 3% in interest.  He wants to invest $3000.  He has 2 options to invest his money. Option A is a simple interest account with a time period of 10 years. Option B is a compound interest account with a time period of 12 years.  What would be his account balance in Option B?

• $4,277.28
• $900
• $1,277.28
• $1,080

Tags

TEKS.MATH.2A.5B

TEKS.MATH.A.9C

9)  A simple interest account earns $75 at a rate of 1.5% over the course of 5 years.  What was the principal amount on the account?

• $5 
• $56 
• $100       
• $1,000

Tags

TEKS.MATH.6.7B

12)  How much more interest is earned if $8,500 is invested into an account paying compound interest of 4% for   6 years compared to investing the $8,500 into an account paying simple interest of 4.5% for 5 years? 

• $1,912.50 
• $2,255.21 
• $8,842.71 
• $342.71

Tags

TEKS.MATH.2A.5B

TEKS.MATH.A.9C

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.

Tags

CCSS.HSA.SSE.A.1

CCSS.HSF.LE.A.1

CCSS.HSF.LE.A.2

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

Tags

CCSS.7.RP.A.3