12/1/21 Compound Interest Practice

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

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

• The time

• The total amount

• The principal amount (original amount)

• The interest rate

Change 6.75% to a decimal.

• 67.5
• .675
• 675
• .0675

Convert 3% to a decimal.

• .03
• .30
• .05
• .06

Convert 70% to a decimal.

• .07
• .70
• .007
• .01

Change 32% into a decimal.

• 32
• 3.2
• .32
• .032

Convert 3.5% to a decimal.

• 3.5
• 350
• .35
• .035

If $1,000 is invested at 16% interest, compounded continuously, for five years, what is the ending balance?

• $1,225,54
• $2,225.54
• $22,255.40
• $225.54

Willie invests $8,515 in a retirement account with a fixed annual interest rate of 5% compounded continuously. What will the account balance be after 20 years?

• $22,017.32

• $23,146.17

• $20,021.95

• $20,943.52

Mark invests $3,285 in a retirement

account with a fixed annual interest rate of

7% compounded continuously. What will

the account balance be after 18 years?

• $12,420.73

• $13,321.33

• $12,671.64

• $11,581.01