Compound Interest

Compound interest refers to the ability of an account to earn interest on the principle (a)   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 (a)   .

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