Compound Interest Problems Solving for Time

Understanding the concept of compounding: How does the frequency of compounding affect the amount of interest earned?

• The frequency of compounding has no effect on the amount of interest earned

• The frequency of compounding decreases the amount of interest earned

• The frequency of compounding affects the amount of interest earned by increasing the number of compounding periods, which leads to higher interest earned.

• The frequency of compounding only affects the principal amount

Find the future value of investing $17,000 at 7.3% compounded semiannually for 3 years. Round the answer to the whole dollar. Do not use any symbols (dollar signs, commas, or decimal points).

Mathematical Equivalence

ON

Zach's parents put $1,500 in her bank account for college tuition. At an interest rate of 8.25% compounded semi-annually, what will be the balance after 18 years?

• $6,273.50

• $6,314.08

• $6,385.72

• $6,427.94

You borrowed $59,000 for 2 years at 11% which was compounded annually.  What total will you pay back?

• $13,693.90

• $1,363.90

• $72,693.90

• $73,793.90

How long would it take for $1650 to reach $1,000,000 at 3%, compounded quarterly? Use desmos.

• 95 years

• 68 years

• 153 years

• 215 years

Adelaide puts $50 in bank A that offers a 5% interest rate compounded quarterly. A year later, she puts $60 in bank B that offers a 7.5% interest rate compounded monthly. How long from the $60 deposit will the amount in both banks be equal?

• 42 years

• 55 years

• 13 years

• NEVER

How do you write the equation for interest compounded a certain amount of times?

• y=Pe^rt

• y=P(1+r/n)^nt

• y=a(1-r)^x

• y=a(1+r)^x

• A

• B

• C

• D

Karla invested $1,000 in savings bonds. If the bonds earn 6.75% interest compounded semi-annually.

Which exponential equation can be used to find how much money Karla will earn in 15 years?

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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. Jay'den wants to know his balance after 15 years? What does 15 represent?

• Principal or initial value, P

• Rate of interest, r

• Number of times interest is compounded, n

• Time, t