Comparing Simple & Compound Interest IP

Which of the following best describes the difference between simple and compound interest?

• Simple interest is easier to calculate than compound interest.

• Simple interest earns interest on the previous interest earned only.

• Compound interest earns interest on the principal plus any previous interest earned.

• Compound interest earns interest on the principal only.

Tags

CCSS.7.RP.A.3

Gwen has saved $3,500 and wants to deposit it into a savings account that earns 4% annual interest for 10 years. Which type of interest will earn more after 10 years, and how much more?

• Simple interest will earn more by $1,400

• Compound interest will earn more by $1,400

• Simple interest will earn more by $1,600

• Compound interest will earn more by $280.85

Wendy and Connor each deposit $8,300 into accounts that earn 3.5% interest for 25 years. Wendy’s account earns annual simple interest and Connor’s account earns annual compound interest. Who will earn more interest after 25 years, and how much more interest will they earn?

• Wendy will earn more interest, $7,252.50 more

• Connor will earn more interest, $4,052.43 more

• Wendy will earn more interest, $5,000 more

• Connor will earn more interest, $5,000 more

Which of the following best describes the difference between simple and compound interest?

• Simple interest is easier to calculate than compound interest.

• Simple interest earns interest on the previous interest earned only.

• Compound interest earns interest on the principal plus any previous interest earned.

• Compound interest earns interest on the principal only.

Tags

CCSS.7.RP.A.3

Gwen has saved $3,500 and wants to deposit it into a savings account that earns 4% annual interest for 10 years. What is the total amount Gwen will have in a simple interest account after 10 years?

• $4,900

• $4,200

• $3,920

• $3,500

Tags

CCSS.7.RP.A.3