Compound Interest

Compound interest refers to the ability of an account to earn interest on the principle ___ the interest previously accrued.

Which of the following would you consider an ASSET?

• Credit Card

• 401(k)

• Checking Account

• Cash

In which scenario might compound interest work AGAINST you?

• Credit Card

• Checking Account

• 401(k)

• Cash

Which of the following would you consider a DEBT?

• Home Equity Line of Credit

• Mortgage

• Emergency Fund

• 529

In the Compound Interest formula, what does the (t) stand for?

• Time in Months

• Tenure

• Trade

• Time in Years

In the Compound Interest formula, the (P) stands for ___.

Using the Compound Interest formula, which of the following would be the MOST VALUABLE after one year?

• $2,000 earning 18% Annually

• $2,200 earning 7% Annually

In your own words, describe COMPOUND INTEREST.

Tags

CCSS.HSF.BF.A.2

When it comes to interest earned, which do you believe is more important?

• Time

• Interest Rate

Do you believe it is more important to eliminate debt, invest, or a combination of the two simultaneously?

• Eliminate Debt

• Invest

• Combination