Compound Interest

Label each part of the formula

b

a

c

d

e

End Amount

Compound Period

Time

Rate

Principle

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?

• P

• Final Amount

• n

• 5 years

• t

• Annually

• A

• $500

• r

• 2.5%

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

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

Match the following:

• r (in both formulas)

• Principal

• Simple Interest

• Time

• Compound Interest

• 
• t (in both formulas)

• 
• P (in both forumals)

• Rate

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

What does the P stand for in this formula?

• Initial amount

• Final amount

• Rate

• Time

• The number of times compounded per year

What does the r stand for in this formula?

• Initial amount

• Final amount

• Rate

• Time

• The number of times compounded per year