Compound Interest

Jacob borrows $500 from Abraham and agrees to have the loan compounded annually for 5 years with an interest rate of 2.5%. How much will the total amount be that Jacob owes?

• A

• 2.5%

• r

• $500

• n

• Final Amount

• t

• 5 years

• P

• Annually

Jacob borrows $500 from Abraham and agrees to have the loan compounded annually for 5 years with an interest rate of 2.5%. How much will the total amount be that Jacob owes?

• $565.70

• $262609.38

• $65.70

• $630.20

Tags

CCSS.HSF-LE.A.1C

Number of times interest is compounded (n) annually ​ (a)   time , semi-annually ​ (b)   times, quarterly ​ (c)   times, and monthly ​ ​ (d)   times.

• 1
• 2
• 4
• 12
• 3
• 24
• 26

Principal: $5000
Interest Rate: 3.75%
Time: 25 years
Compounded Monthly
State the future account balance.

• $12712.31
• $12,749.30
• $12,657.59
• $12550.84

Steve deposited $5,000 in a savings account that pays 4% interest compounded quarterly.

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(0.04)³

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

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 have in 10 years?

• $4915.59

• $3933.28

• $2979.81

• $4005.09

Change 6.75% to a decimal.

• 67.5
• .675
• 675
• .0675

Which savings account will pay more on a $5,000 investment over 5 years, and by how much?

Bank 1: 3% interest compounded monthly

Bank 2: 3.15% interest compounded annually

• Bank 1 by $30.61

• Bank 2 by $30.61

• Bank 1 by $56.21

• Bank 2 by $56.21

Sally is going to start saving for retirement. She is going to save $10,000 in an account that pays 7.5% interest compounded daily. How much money will she make in interest if she leaves the money in the account for 35 years?

• $38,900

• $87,197

• $121,652

• $138,009