DMS G8 U9 Lesson 2 Simple Interest

Carla puts $1000 into a savings account that pays 5% simple interest once per year. How long will it take her to double her money if she adds nothing to the account?

• 15 years

• 2 years

• 16 years

• 20 years

You found that it would take Carla 20 years to double her initial investment of $1000 using 5% simple interest paid annually. Suppose Carla finds a bank that pays compound interest annually. What interest rate would she need to get in order to still double her investment in 20 years?

• 5%

• 3.53%

• 2.39%

• 3.47%

Kevin plans to invest $3,000. He is investigating various savings options. One option is a savings account that offers 2% interest compounded annually. How much will Kevin’s $3,000 investment be worth after 10 years?

• $3,656.98

• $3,050.38

• $32,295.49

• $36,506.15

Kevin finds another savings option for his $3,000. This savings account pays a higher interest rate, but doesn’t allow him to access his money for 10 years. The account offers 5% interest compounded annually. How much will Kevin’s $3,000 investment be worth after 10 years under this option?

• $3,127.37

• $4,941.03

• $42,620.36

• $4,886.68

Kevin is considering two options for investing $3,000. One savings account offers compound interest of 2% paid annually. The other account offers compound interest of 5% paid annually, but he cannot access the money for 10 years. Kevin decides to compare the two savings options further.

Select all the statements below that are true.

• After 20 years, Kevin’s original investment of $3,000 will earn $3,502.05 more in the 5% account than in the 2% account.

• After 20 years, Kevin’s original investment of $3,000 will earn $7,959.89 more in the 5% account than in the 2% account.

• It will take 35 years for him to double his money in the 2% account.

• It will take 18 years for him to double his money in the 5% account.

Starting money = $350.
Interest rate = 2.5%
TIme = 3 years.
How much interest?

• $7.50

• $26.25

• $87.50

• $262.50

Calculate the interest. I = PRT,

Principal = $1000,

Rate = 6%,

Time = 2 years

• $100

• $120

• $180

• $1200

Emilio borrows $1200 from a bank with 8% simple interest per year.  How much will he have to pay back total in 2 years?

• $150

• $192

• $1350

• $1392

The simple interest formula is I=Prt.  The P represents the principle.  The principle is ___________________.  

• the amount of money borrowed or deposited

• the percent interest for this year

• the amount taxed

• the amount the bank owes you for being a customer at their bank

The simple interest formula is I=Prt.  What does the t represent?

• Principle

• Interest

• Time

• Percent Rate