Simple and Compound Interest

In the Compound Interest Formula, A stands for

• The total amount in the account after a certain amount of time

• The original amount invested

• The actual amount of the investment

• The annual interest rate

In the compound interest formula, P stands for

• The primary amount

• The principal amount

• The original amount invested

• The pickles on top

In the compound interest formula, i stands for

• The interest rate per year

• The interest rate per compounding period

• The interest rate per month

• The interest rate per dollar

In the compound interest formula, the n stands for

• the number of dollars invested

• the number of compound periods

• the number of compound periods total

• the number of compound periods per year

You invest $2000 at 6%/a, compounded semi-annually, for 7 years. Determine the value of n.

• n = 6

• n = 7

• n = 2

• n = 14

You invest $2000 at 6%/a, compounded semi-annually, for 7 years. Determine the value of i.

• i = 3%

• i = 6%

• i = 0.03

• i = 0.06

To make the most of an investment, you want to invest in an account with ___________ interest

• simple

• compound

An investment will be 7%/a.

What does this mean?

• 7% per compound period

• 7% per annum

• 7% per month

• 7% per year

The P in the simple interest formula stands for

• The primary amount

• The price

• The principal amount

• The pace

The r in the simple interest formula stands for

• The interest rate per dollar

• The interest rate per year

• The interest rate per compound period

• The interest rate per month