Simple & Compound Interest

The simple interest formula is I=Prt. And for compound interest, the formula is A=P(1+r)^t. The P represents the principle. The principle is ___________________.

• the amount of money borrowed or deposited

• the amount taxed

• the percent interest for this year

• the amount the bank owes you for being a customer at their bank

Ann puts $300 in a bank account earning 4% interest. How much will she earn in simple interest in 1 year?

• 4

• 8

• 12

• 16

I = Prt where r represents the rate.  Rates must be converted into ____ before multiplying.

• fractions
• mixed numbers
• decimals
• integers

Smithville Bank is offering each of it's customers a record 3.4% simple interest on new savings account. If Mr. Thomas opens an account with $1,500, how much interest will he earn in 3 years?

• $15,300

• $1,530

• $153

• The answer is not shown

Find the compound interest:
Principal: $1735
Interest Rate: 0.8%
Time: 1 year

• $1,388
• $138.80
• $13.88
• None of the answers are correct.

3)  Jose invests $200 into an account at a rate 2%.  He plans on keeping the account open for 15 years.  If it is a compound interest account, about how much money will he have in the account after 15 years?

• $60         
• $70
• $260       
• $270