Personal Finance: Compound Interest

Exponential Growth:

What is the value of the square in the second row and fifth column of the chessboard?

• 1,024

• 2,048

• 4,096

• 8,192

What is the amount on Wednesday of the second week in the compound interest chart?

• $10.24

• $0.08

• $20.48

• $40.96

Compound Interest:

According to the compound interest chart, what is the final amount on Saturday of the fifth week?

• $671,088.64

• $1,342,177.28

• $10,485.76

• $5,368,709.12

What does the 'p' stand for in the simple interest formula i = prt?

• Percentage

• Profit

• Principle

• Payment

What must be the unit of time when calculating simple interest using the formula i = prt?

• Days

• Months

• Years or portions of a year

• Hours

In the simple interest formula, what does 'i' represent?

• Income

• Installment

• Interest

• Increase

Which of the following is the correct formula for calculating simple interest?

• i = prt

• i = p + r + t

• i = p / r / t

• i = p - r - t

What is your return if you invested $600 at 5% (0.05) for 1 year?

• $3000

• $30

• $300

• $3

What is compound interest?

• The interest calculated on the initial principal only

• The interest an investor earns on his or her original investment plus all the interest earned on the interest that has accumulated over time

• A fee charged for borrowing money

• The total amount of money borrowed

Who discovered the constant e?

• Isaac Newton

• Albert Einstein

• Jacob Bernoulli

• Leonhard Euler