Compounded Interest Word Problems

Does the following equation show growth or decay?
y=10,000*1.26^x

• Growth 

• Decay

Jay'den 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?

• $827.52

• $831.10

• $839.45

• $846.80

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

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

• $1,584.62

• $2,651.39

• $2,706.86

• $1,825.10

Emily 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.

• $15,415.94

• $15,683.28

• $15,927.56

• $16,109.05

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?

• $1,584.62

• $2,651.39

• $2,706.86

• $1,825.10

 Halle deposited $4000 into an account that earns 5% interest each year.  The growth of her investment can be expressed by the exponential equation, A = 4000(1 + .05)^t, where A is the amount in the account after t years.  In how many years will her account exceed $10,000?

• 19 years

• 16 years

• 22 years

• 25 years

You have inherited land that was purchased for $25,000 in 1970. The value of the land has appreciated by approximately 4% per year. What was the value of the land in the year 2000? Round to the nearest whole dollar.

• $750,000

• $605,035,808

• $81,084

• $7,346

What does the n stand for in this formula?

• Initial amount

• Final amount

• Rate

• Time

• The number of times compounded per year

Treasure 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 have in 10 years?

• $4915.59

• $3933.28

• $2979.81

• $4005.09