AMDM Unit 4 Test

Sophia is comparing two investment options for a 10-year period:

• Option 1: A savings account that compounds interest annually at a rate of 6%.

• Option 2: A certificate of deposit that offers a fixed return of $500 per year.

• Based on these options, which function represents the value of the savings account after x years if the initial investment is $1,000?

• y=1000(1+0.06)^x

• y=1000+500x

• y=1000(1+0.06x)

• y=500x

Sophia is comparing two investment options for a 10-year period:

Option 1: A savings account that compounds interest annually at a rate of 6%.

Option 2: A certificate of deposit that offers a fixed return of $500 per year.

Which of the following correctly describes the comparison between the two investments after 10 years?

• The certificate of deposit will always have a higher total value.

• The savings account grows faster and will eventually surpass the certificate of deposit.

• Both investments will have the same total value after 10 years.

• The savings account grows linearly, while the certificate of deposit grows exponentially.

What type of function best models the depreciation of a car's value over time?

• Exponential

• Linear

• Quadratic

• Sinusoidal

Which of the following interest types involves earning interest on both the initial principal and the previously earned interest?

• Simple interest

• Compound interest

• Continuous interest

• Periodic interest

What does the "A" represent in the compound interest formula A=P(1+r/n)^(nt)?

• Amount of interest earned

• Final balance

• Initial deposit

• Number of periods

If interest is compounded monthly, how many compounding periods are there in one year?

• 12

• 6

• 365

• 52

What is the key difference between simple interest and compound interest?

• Simple interest adds interest to the principal; compound interest adds interest to the previous balance.

• Simple interest adds interest to the principal only once; compound interest adds interest multiple times.

• Simple interest depends on compounding frequency; compound interest does not.

• None of the above.

Identify the interest rate if an account earning $2,000 grows to $2,420 in 4 years with simple interest.

• 5%

• 6%

• 7%

• 8%

What formula should be used to calculate the value of an account with interest compounded continuously?

• A=P(1+r)^t

• A=P(1+r/n)^(nt)

• A=Pe^rt

• A=P+Prt

Courtney saved up $2,200 working as a waitress over the summer. She put this money into a bank account that earned 5.2% interest and is compounded daily. How much will she have in her account at the end of 4 years?

• $2201.25
• $2694.55
• $2707.45
• $2708.63

Tags

CCSS.HSA.CED.A.1

CCSS.HSF.BF.A.1

CCSS.HSF.LE.A.1

CCSS.HSF.LE.A.2