HOLUB- 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.

Tags

TEKS.MATH.2A.5B

TEKS.MATH.A.9C

Brandon 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 year?

• $827.52

• $831.10

• $839.45

• $846.80

Tags

TEKS.MATH.2A.5B

TEKS.MATH.A.9C

Jared borrows $1200 from a bank with 8% simple interest per year. How much will he have to pay back total in 2 years?

• 150

• 192

• 1350

• 1392

Tags

TEKS.MATH.7.4D

Paul deposits $5000 in a bank which pays a compund interest rate of 4% per year. How much will he have in 6 years.

• $4866.61

• $5628.40

• $6077.53

• $6326.60

A bank is offering 7% annual compound interest on a savings account.  If you deposit $1,500, how much interest will you earn in three years?

• $1837.56
• $337.56
• $30000
• $31500

Tags

TEKS.MATH.2A.5B

TEKS.MATH.A.9C

Harley wants to buy a car that costs $15,000.

Bank One offers her a 3 year loan at a simple interest rate of 9%.

Bank Two offers her a 5 year loan at an annual compound interest rate of 3.5%.

Which bank offer should she choose?

• She will pay $1,234.70 less if she chooses Bank Two.

• She will pay $1,234.70 less if she chooses Bank One.

Tags

TEKS.MATH.2A.5B

TEKS.MATH.A.9C

Rosie will deposit $1,420 in an account that earns 4% simple interest every year for 4 years.

Her sister Avery will deposit $1,400 in an account that earns 6% interest compounded annually for 4 years.

What is the difference in the amount earned between the two sisters over the 4 years?

• Rosie will earn $120.27 more than Avery.

• Avery will earn $1540.27 more than Rosie.

• Rosie will earn $1540.27 more than Avery.

• Avery will earn $120.27 more than Rosie.

Tags

TEKS.MATH.2A.5B

TEKS.MATH.A.9C

Monica is depositing $6,000 into a savings with an interest rate of 4.25% for 8 years.

How much more interest will she earn if the interest is compounded annually, as opposed to simple interest?

• $2040.00

• $2370.66

• $330.66

• $5669.34

Tags

TEKS.MATH.2A.5B

TEKS.MATH.A.9C

You lend $240 to your friend. He pays you back $30 in interest in one year. What interest rate did you charge your friend?

• 88%

• 20%

• 12.5%

• 10%

Tags

TEKS.MATH.7.4D