Quiz about Compound Interest Expressions

Question 1

Bruno was given $2000 when he turned 3 years old. His parents invested it at a 2% interest rate compounded annually. No deposits or withdrawls were made. Which expression can be used to determine how much money Bruno had in the account when he turned 16?

Accepted Answer

2000(1+0.02)¹³

Answer

2000(1-0.02)¹³

Answer

2000(1+0.02)¹⁶

Answer

2000(1-0.02)¹⁶

Question 2

The compound interest formula is:
A = P(1 + r)^tWhat does the A represent?

Accepted Answer

The total amount of money after a certain amount of time.

Answer

The amount of interest earned.

Answer

The amount of time that has passed.

Answer

The amount required to invest.

Question 3

Riley invested $1,000 in savings bonds. If the bonds earn 6.75% interest compounded semi-annually, how much total will Riley earn in 15 years?

Accepted Answer

$2,706.86

Answer

$1,584.62

Answer

$2,651.39

Answer

$1,825.10

Question 4

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.

Accepted Answer

$15,683.28

Answer

$15,415.94

Answer

$15,927.56

Answer

$16,109.05

Question 5

Principal: $5000
Interest Rate: 3.75%
Time: 25 years
Compounded Monthly
State the future account balance.

Accepted Answer

$12,749.30

Answer

$12712.31

Answer

$12,657.59

Answer

$12550.84

Question 6

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.

Accepted Answer

Option 1

Answer

Option 2

Question 7

The Arnold's took out a loan for $195,000 to purchase a home. At 4.3% interest rate compounded annually, how much will they have paid after 30 years?

Accepted Answer

$689,546.99

Answer

$412,749.79

Answer

$529.305.61

Answer

$640,891.53

Question 8

Shawn is buying a new Jet Ski for $12,500. He is considering 2 credit options. Option A offers a 6 year loan with 8.5% interest compounded quarterly, while Option B offers a 5 year loan with10% interest compounded annually.Which option is better and how much will he save?

Accepted Answer

D) B; $573.83 do something crazy

Answer

A) A; $495.21 raise money for charity

Answer

B) A; $573.83 get attention

Answer

C) B; $495.21 get on the news

Question 9

You want to save $5,000 for future family vacation.  If the bank pays 4.3% compounded monthly for 3 years, then how much will you need to invest to reach your vacation goal?

Accepted Answer

$4,395.89

Answer

$307,042,791

Answer

$5,000

Answer

$3,250

Question 10

The Principal and Interest are always___________.

Accepted Answer

money

Answer

fraction

Answer

decimal

Answer

percent

Question 11

Jimmy invested $200 in a retirement account that had a rate of 20% that compounds annually.  If Jimmy leaves his money puts the money in when he is 24 and takes it out when he is 64, how much money will be in his account rounded to the nearest dollar?

Accepted Answer

$293954

Answer

$29395

Answer

$293954.31

Question 12

Write the decimal as a percent.
0.37

Accepted Answer

37%

Answer

3.7%

Answer

.37%

Question 13

Write the percent as a decimal.
4.3%

Accepted Answer

.043

Answer

4.3

Answer

.43

Answer

4300

Question 14

Find the total amount in the account to the nearest cent if the interest is compounded annually.
$2750 at 8% for 2 years

Accepted Answer

$3207.60

Answer

$2200.00

Answer

$8910.00

Answer

$2750

Question 15

The power of compound interest works BEST the longer an investment is allowed to grow

Accepted Answer

True

Answer

False

Question 16

Andy took out a $12,400 loan so that he could get the car that he wanted. The car salesman gave him the loan with a 7% compound interest rate. How much will Andy have to pay back in interest if he takes 4 years to pay it back?

Accepted Answer

$3,853.87

Answer

$3,917.55

Answer

$3,472

Answer

$16,253.87

Question 17

Audi's parents put $1,500 in her bank account for college tuition. At a compound interest rate of 8%, what will be the balance after 18 years?

Accepted Answer

$5994.03

Answer

$2160

Answer

$3300

Answer

$4494.03

Question 18

Gandolf invested $1,000 in savings bonds. If the bonds earn 6% compound interest, how much total will Gandolf earn in 15 years?

Accepted Answer

$2,396.56

Answer

$1,396.56

Answer

$900

Answer

$1900

Question 19

Olivia would like to buy some new furniture for her home. She decides to buy the furniture on credit with 9% compound interest. If she spent $7,400, how much total will she have paid after 8 years.

Accepted Answer

$14,744.96

Answer

$7,344.96

Answer

$12,728

Answer

$18,456

Question 20

The charge paid by people for use of borrowed money is called

Accepted Answer

Interest

Answer

Principal

Answer

Line of Credit

Answer

Compound Interest

Question 21

The process of earning interest on previously credited interest is called

Accepted Answer

Compounding

Answer

Rounding

Answer

Accumulation

Answer

Installment Savings

Question 22

The original amount of money that people save or invest is known as

Accepted Answer

Principal

Answer

Interest

Answer

Compound Interest

Answer

Seed Money

Question 23

Owing outstanding debt decreases the amount of money that people have available to spend or save in the future.

Accepted Answer

True

Answer

False

Question 24

The longer it takes for people to pay off a debt, the less interest they pay.

Accepted Answer

False

Answer

True

Question 25

Kennedy won $3,000 from a radio contest. If she puts this money in a bank account that earns 2.9% interest compounded quarterly, how much total will she earn in 10 years?

Accepted Answer

$4005.09

Answer

$4915.59

Answer

$3933.28

Answer

$2979.81

Question 26

What does the "n" stand for in the formula?

Accepted Answer

Number of times compounded

Answer

Time in years

Answer

Amount of money

Answer

Rate

Question 27

Caiden earned $475 from mowing lawns last summer. He deposited this money in an account that pays an interest rate of 3.8% compounded annually. What will be his balance after 15 year?

Accepted Answer

$831.10

Answer

$827.52

Answer

$839.45

Answer

$846.80

Question 28

Audrey deposited $2,800 in a savings account that pays 2.65% interest compounded annually. What is the total value of the account after 7 years?

Accepted Answer

$3,362.57

Answer

$562.57

Answer

$14,514.15

Answer

$2,569,680.00

Question 29

Karl used his credit card to buy a

90-inch HD flat-screen TV for $2,600. The credit card company charges 28%

compound interest per year. If Karl made no payments for 2 years, how much

would he owe the credit card company?

Accepted Answer

$4,259.84

Answer

$5,069.84

Answer

$4,772.18

Answer

$4056.00

Question 30

Invest $500 for 3 years @ 2.5% compounded daily.

Accepted Answer

$538.94

Answer

$539

Answer

$538.95

Answer

$538.93

Question 31

Principal: $999
Interest Rate: 5.45%
Time: 19 years
Compounded Quarterly
State the future account balance.

Accepted Answer

$2794.10

Answer

$2738.11

Answer

$2774.98

Answer

$2807.11

Question 32

A credit card is a way to ______ money.

Accepted Answer

borrow

Answer

inherit

Answer

steal

Answer

give away

Question 33

This is the term used when money is being taken out, or subtracted, from an account

Accepted Answer

withdrawal

Answer

deposit

Answer

balance

Answer

charge

Question 34

This is the term used when money is being added into an account.

Accepted Answer

deposit

Answer

withdrawal

Answer

charge

Answer

balance

Question 35

A credit card user is issued one of these if they fail to make a payment on time.

Accepted Answer

late fee

Answer

balance

Answer

credit

Answer

interest

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