Calculating Simple and Compound Interest

Mrs. Baxter deposits $2,000 in an account that earns 5% simple interest.

This is a ​ (a)   interest problem.

I would use the formula ​ (b)   to find the interest in this situation.

• simple
• compound
• I = prt
• A = p (1+r)*

Mrs. Baxter deposits $2,000 in an account that earns 5% simple interest. How much is Mrs. Baxter's investment worth after 8 years?

Do not write the $ sign. Round answer to the nearest hundredth

Mathematical Equivalence

ON

Joey made a deposit into an account that earns 6% simple interest. After 3 years Joey had earned $400. How much was Joey's initial deposit?

This is a ​ (a)   interest question.

I will use the ​ (b)   formula to solve this problem.

• simple
• I = prt
• compound
• A = p(1+r)*

Joey made a deposit into an account that earns 6% simple interest. After 3 years Joey had earned $400. How much was Joey's initial deposit?

Do not type the $ symbol. Round answer to the nearest penny.

Mathematical Equivalence

ON

Coach Cliffman made a deposit of $1,800 into an account that earns 2% annual compound interest. Find the amount of interest that Coach earned after 3 years.

This is a ​ (a)   interest problem.

I will use the ​ (b)   formula to solve this problem.

• compound
• A = p(1+r)*
• simple
• I = prt

Coach Cliffman made a deposit of $1,800 into an account that earns 2% annual compound interest. Find the amount of interest that Coach earned after 3 years.

Do not write $ symbol. Round answer to the nearest hundredth

Mathematical Equivalence

ON

Peter is calculating the interest earned on a deposit of $275 in an account that earns 8% simple interest after 12 years. His work is below.

I = 275(0.8)(12)

I = 2,640

What did Peter mark incorrectly?

Peter is calculating the interest earned on a deposit of $275 in an account that earns 8% simple interest after 12 years.

What is the correct amount of interest he earned?

round answer to the nearest penny

Mathematical Equivalence

ON

Isabella is calculating the interest earned on a deposit of $3,000 in an account that earns 4% compound interest after 6 years. Her work is shown below. Isabella determines that her deposit will then be worth $6,795.96. Explain what she did incorrectly.

A = p(1+r)*

A = 3,000 ( 1+.04)^6

A = 3,795.96

Isabella is calculating the interest earned on a deposit of $3,000 in an account that earns 4% compound interest after 6 years.

What is the correct amount of interest earned?

Mathematical Equivalence

ON