Investment and Savings Quiz

What is the formula to calculate the present value of a periodic investment?

• P = \( \frac{B}{(1 + r)^t} \)

• P = \( \frac{B(\frac{r}{n})}{(1+\frac{r}{n})^{nt}-1} \)

• P = B \times (1 + r)^{nt}

• P = \( \frac{B}{(1 + \frac{r}{n})^{nt}} \)

What is the interest rate used in the example for Ritika's savings account?

• 2.5%

• 3.8%

• 4.5%

• 5.0%

Tags

CCSS.7.RP.A.3

How many times is the interest compounded annually in Ritika's example?

• 12

• 365

• 52

• 1

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CCSS.HSF-LE.A.1C

For how many years does Ritika plan to keep her savings in the account?

• 5 years

• 10 years

• 15 years

• 20 years

What does the variable 'B' represent in the present value formula?

• Beginning balance

• Ending balance

• Bonus amount

• Base amount

Tags

CCSS.HSF-IF.C.8B

What does the variable 'r' represent in the present value formula?

• Rate of return

• Interest rate expressed as a decimal

• Risk factor

• Revenue

Tags

CCSS.HSF.BF.A.2

Nick wants to install central air conditioning in his home in 3 years. He estimates the total cost to be $15,000. How much must he deposit monthly into an account that pays 4% interest, compounded monthly, to have enough money?

• $392.86

• $350.00

• $400.00

• $450.00

What is the compounding frequency used in both examples?

• Annually

• Semi-annually

• Quarterly

• Monthly

In Example 3, what is the total cost Nick estimates for the air conditioning?

• $10,000

• $12,000

• $15,000

• $18,000

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CCSS.4.NBT.B.5

How many years does Randy plan to save for his goal in Example 4?

• 10 years

• 15 years

• 20 years

• 25 years

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CCSS.6.EE.B.7