4/26 Compound Interest

In the compound interest formula A=P(1+r)^t what does the A stand for?

• The amount of interest

• The total amount

• The interest rate

• The time

Jacob borrows $500 from Abraham and agrees to have the loan compounded annually for 5 years with an interest rate of 2.5%. How much will the total amount be that Jacob owes?

• $565.70

• $262609.38

• $65.70

• $630.20

Hei-Hei has $1500 in a retirement account earning 5% interest compounded annually. After 5 years how much does Hei-Hei have in the account?

• $1750

• $2010.14

• $2500

• $1914.42

Henry deposits $750 into a college savings account that is compounded annually when his parents received as a stimulus package. If Henry lets the money sit in the account without adding or removing any and receives a 8.5% interest rate, how much money will he have total after 5 years?

• $1127.74

• $1535.24

• $2345.67

• $850.76

If you wanted to amount of interest an account has earned after being compounded annually. What would you have to do after you found "A" using the formula A=P(1+r)^t ?

• Add A (total amount) plus P (original amount)

• Subtract A (total amount from P (original amount)

• Add P (original amount) plus A (total amount)

• Subtract P (original amount) from A (total amount)

Daniel invests $360 in a bank account that is compounded annually for 8 years with an interest rate of 5.5%. What will be the total amount in the account after the 8 years is over?

• $625.88

• $950.12

• $315.45

• $552.49

Heather

invested $8,000 in a 4-year Certificate of Deposit (CD) that pays 4.1% interest

compounded annually. How much interest will the CD have earned at the end of the 4 years?

• $9,394.92

• $9,312.00

• $1394.92

• $1312.00

Zach's parents put $1,500 in her bank account for college tuition. At an interest rate of 8.25% compounded annually, how much interest will the account have earned after 18 years?

• $6,273.50

• $4748.76

• $6,385.72

• $6,427.94

Treasure won $3,000 from a radio contest. If she puts this money in a bank account that earns 2.9% interest compounded annually, how much interest will the account earn in 10 years?

• $4915.59

• $3992.78

• $2979.81

• $992.78

Kennedy won $3,000 from a radio contest. If she puts this money in a bank account that earns 2.9% interest compounded annually, how much interest will she earn in 10 years?

• $3992.78

• $992.78

• $979.81

• $1,005.09