untitled

The principal in an investment or loan is _________.

• the amount of money borrowed or deposited

• the amount taxed

• the percent interest for this year

• the amount the bank owes you for being a customer at their bank

To earn as much interest as possible, you should open a savings account that earns ______ interest and has the _____ interest rate.

• compound; lowest
• simple ; lowest
• compound ; highest
• simple ; highest

What is the formula for simple interest?

• FV=PV(1+r)^t

• I=Prt
• I=P(1+r)t

• FV=Prt

What does P stand for in I = Prt ?

• percent
• partner
• percent change
• principal

A bank is offering 2.5% simple interest on a savings account. If you deposit $5,000, how much interest will you earn in three years?

• $5375

• $375

• $3750

• $425

Sarah borrowed $18,000 for 4 years at an annual simple interest rate of 7%. What is the total amount she will repay for the car loan?

• $504000

• $5040

• $23040

• $18000

Kara borrowed $21,000 for 5½ years at an annual compound interest rate of 7.5% to buy a car. What is the total amount she will repay the bank for the auto loan?

• $31258.34

• $10258.34

• $455961.91

• $27165

The Sutton family took out a loan for $450,000 to purchase a home. At a 6.1% interest rate compounded annually, how much interest will they have paid after 30 years?

• $2,658,728.74

• $2,208,728.74

• $3,108,728.74

• $68,105.20

Lisa earned $20 in interest after leaving her money in the bank for 1 year at a 5% interest rate. How much did Lisa deposit?

• $200

• $300

• $500

• $400

In the formula for simple interest, what does the t stand for?

 $I=P\times r\times t$  

• Time in years

• Time in months

• Thousands

• Tips