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

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CCSS.HSA.CED.A.1

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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

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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

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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

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CCSS.HSA.CED.A.1

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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

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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

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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

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CCSS.HSA.CED.A.1

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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

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CCSS.HSA.CED.A.1

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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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CCSS.HSA.SSE.A.1

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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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