CH3L6

You make an investment of $500 at 12% interest over the course of 20 years. Using this hypothetical, identify the rate of return.

• $500

• 12%

• 20 Years

You make an investment of $500 at 12% interest over the course of 20 years. Using this hypothetical, identify the principal.

• $500

• 12%

• 20 Years

You make an investment of $500 at 12% interest over the course of 20 years. Using this hypothetical, identify the term.

• $500

• 12%

• 20 Years

Recall what makes compound interest more profitable than simple interest.

• Compound interest requires no principal.

• Investments with compound interest come with shorter terms.

• Profits earned this way are tax free.

• It allows you to earn interest on top of previously earned interest.

Determine the total growth for the following investment:

$1000 invested with a 10% interest rate, compounded yearly, over the course of 10 years.

Mathematical Equivalence

ON