Compound Interest #1

Semi-Annually means how many times a year?

• 4

• 2

• 1

• 6

Monthly means how many times a year?

• 4 
• 12
• 52
• 365

Riley invested $1,000 in savings bonds. If the bonds earn 6.75% interest compounded semi-annually, how much total will Riley earn in 15 years?

• $1,584.62
• $2,651.39
• $2,706.86
• $1,825.10

Heather invested $8,000 in a 4-year Certificate of Deposit (CD) that pays 4.1% interest compounded annually.

What is the value of the CD at the end of the 4 years?

• $9,394.92

• $9,312.00

• $1394.00

• $1312.00

Treasure won $3,000 from a radio contest. If she puts this money in a bank account that earns 2.9% interest compounded quarterly, how much total will she earn in 10 years?

• $4915.59

• $3933.28

• $2979.81

• $4005.09

Zach's parents put $1,500 in his bank account for college tuition. At an interest rate of 8.25% compounded semi-annually, what will be the balance after 18 years?

• $6,273.50

• $6,314.08

• $6,385.72

• $6,427.94

If you are opening a savings account, is it better to have interest compounded weekly or quarterly at 7%?

• Weekly - so you earn money more often

• Quarterly - so you earn money less often

• Both will earn equal amounts of interest

• I need to consult my financial analyst

Steve deposited

$5,000 in a savings account that pays 4% interest compounded annually. Which

equation could be used to find the value of the account after 3 years?

• A = 5,000(1 + 4)³

• A = 5,000(1 + 0.04)³

• A = 5,000(1 + 0.4) x 3

• A = 5,000(0.04)³

Quarterly means how many times a year?

• 4

• 2

• 1

• 6

Weekly means how many times a year?

• 4

• 2

• 1

• 52