6-1:Simple & Compound Interest

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

Answer explanation

Calculate simple interest then add that to the loan amount

Mark took out a loan for $25,690 to purchase a new truck at a simple interest rate of 5.2%. How much INTEREST will he pay on his truck after 5 years?

• $6,679.40

• $32,369.40

• $66,794

• $679.40

Answer explanation

Calculate just the simple interest

Olivia would like to buy some new furniture for her home. She decides to buy the furniture on credit with 9.5% simple interest. If she spent $7400 on furniture, how much will she have paid in TOTAL after 8 years?

• $5624

• $13,024

• $56,240

• $1302.40

The Henley’s took out a new home loan for $195,000 at a simple interest rate of 4.3%. How much will they pay in INTEREST after 30 years?

• $446,550

• $2515.50

• $25,155

• $251,550

The rate is given as a percent (%).  Before using it in the simple interest formula, you must first convert it to a______.

• fraction
• decimal
• ratio
• dollar amount

True of False:  Before you can calculate INTEREST your time must be in MONTHS!

• FALSE
• TRUE

Your 3 year investment of $20,000 received 5.2% interest compounded annually.  What is your total return?

• $23,285.05
• $3,285.05
• $2,385
• $32,285

Olivia would like to buy some new furniture for her home. She decides to buy the furniture on credit with 9.5% interest compounded quarterly. If she spent $7,400, how much total will she have paid after 8 years.

• $15,415.94
• $15,683.28
• $15,927.56
• $16,109.05

Given an investment of $1,500:
Which investment would have a larger balance after 5 years?
Option 1 - 4% compounded monthly
Option 2 - 3.9% compounded daily. 

• Option 1
• Option 2

Karla invested $1,000 in savings bonds. If the bonds earn 6.75% interest compounded semi-annually.

Which exponential equation can be used to find how much money Karla will earn in 15 years?

• 
• 
• 
•