REVIEW, REVIEW, REVIEW: Compound/SIMPLE

Martha wants to invest $8000 into a savings account that pays 5.6% simple interest. If Martha makes no withdrawals or deposits to the account, how much will be in the account after 36 months.

• $2000

• $1344

• $9344

• Not here

Audrey deposited $2,800 in a savings account that pays 2.65% interest compounded annually. What is the total

value of the account after 7 years?

• $562.57

• $3362.57

• $14,514.15

• $2,569,680

Jerry borrowed $4,000 for 5 years at 6% simple interest rate. How much interest is that?

• $800
• $1,000
• $1,200
• $1,500

6)  Clay has 5 years to save money for a car.  He wants to invest $800 in the bank.  He has 2 banks to choose from. Wells Fargo offers a simple interest account with a rate of 4%.  Chase Bank offers a compound interest account with a rate of 4%. Which bank will provide Clay with the most money after 5 years?

• Wells Fargo
• Chase Bank

Jose wants to save money for a house and finds two accounts that pay 3% in interest. He wants to invest $3000. He has 2 options to invest his money. Option A is a simple interest account with a time period of 10 years. Option B is a compound interest account with a time period of 12 years. Which account option will save him more money?

• Option A - Simple Interest

• Option B - Compound Interest

Which one will pay you more at the end of 5 years if you invest $8,500 into an account paying compound interest of 4% or investing the $8,500 into an account paying simple interest of 4.5%?

• Simple Interest

• Compound Interest

Tommy invests $10,000 in a savings account that pays 3.5% simple interest. If Tommy makes no withdrawals or deposits to the account, how much will be in the account after 7 years.

• $2,450

• $11,750

• $12,450

• Not here

The compound interest formula is:

A = P(1 + r)t

What does the A represent?

• The amount of interest earned.

• The amount of time that has passed.

• The total amount of money after a certain amount of time.

• The amount required to invest.

How much more interest will you earn if you invest $1000 in a compound interest account at 5% for 10 years compared to a $1000 investment at 5% in a simple interest account for 10 years?

• $500

• $628.89

• $128.89

• $312.88

Which of the two options will give you the most interest. Investing $7,600 into an account paying compound interest of 4.4% for 6 years or investing the $7,600 into an account paying simple interest of 3.8% for 5 years?

• $1900

• $2240

• $1200

• $1444