LT 6.3 Compound Interest and Investment Calculations

• total amount
• Principal, starting amount
• interest rate as a decimal
• number of times per year
• number of times multiplied by number of years
• number of years

Compounded daily means n = ​ (a)  

Compounded weekly means n = ​ (b)  

Compounded monthly means n = ​ (c)  

Compounded annually means n = ​ (d)  

• 365
• 52
• 12
• 1
• 31
• 30
• 2

For an investment, which rate of compound interest would give you the most money?

• Compounded daily

• Compounded weekly

• Compounded monthly

• Compounded annually

A savings account has 2.3% interest compounded monthly. If you put in $400, which expression shows that value after 5 years?

A student loan has an interest rate of 7.5% compounded daily. If you borrow $5000, how much would you owe in 4 years? Identify the parts of the compound interest equation.

P=​ (a)   r=​ (b)   n=​ (c)   nt=​ (d)  

• 5000
• 0.075
• 365
• 1460
• 4
• 7.5
• 0.75
• 12

A student loan has an interest rate of 7.5% compounded daily. If you borrow $5000, how much would you owe in 4 years? Round to the nearest cent.

Mathematical Equivalence

ON

If you invest $2000 at 3.9% interest compounded monthly, how much would the investment be worth in 10 years? Identify the parts of the compound interest equation.

P=​ (a)   r=​ (b)   n=​ (c)   nt=​ (d)  

• 2000
• 0.039
• 365
• 120
• 10
• 3.9
• 0.39
• 12

If you invest $2000 at 3.9% interest compounded monthly, how much would the investment be worth in 10 years? Round your answer to the nearest cent.

Mathematical Equivalence

ON