Simple and Compound Interest Practice

Mr. Lawson needs to borrow $8,000 to help pay his son's college tuition. He explored options from several banks. The options are shown in the table.

Which option allows Mr. Lawson to pay the smallest amount of interest?

Tags

TEKS.MATH.8.12A

JOsiah opened a savings account with $600. The account earns 3.5% interest compounded annually. How much money will Josiah have in his account after 5 years without additional deposits or withdrawals?

Round to the nearest hundredth if necessary.

Mathematical Equivalence

ON

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TEKS.MATH.8.12D

When Samuel was born, his grandmother opened up a savings account to save

money to give to him as a graduation gift. Samuel’s grandmother deposited

$1,750 into the account. It earns 4.25% simple interest each year. If his

grandmother makes no additional deposits or withdrawals, what will be the total

account balance after 18 years?

• $1,388.75

• $3,088.75

• $4,104.59

• $2354.59

Tags

TEKS.MATH.8.12D

A customer needs to borrow $9,500 to purchase a car. Which loan option should the customer choose in order to pay the smallest amount of interest?

• A 3-year loan with a 8.1% annual simple interest rate

• A 4-year loan with a 7.3% annual simple interest rate

• A 5-year loan with a 5.2% annual simple interest rate

• A 6-year loan with 6% annual simple interest rate

Tags

TEKS.MATH.8.12A

Charlie and his sister Samantha opened savings accounts at different banks on the same day. Charlie deposited $785 into his account that earns 3.6% interest compounded annually. Samantha deposited $900 into her account that earns 3.1% simple interest. Which statement best compares the interest that Charlie and Samantha will have earned in their savings accounts after 5 years?

• Charlie’s savings account will earn $12.35 less interest than Samantha’s savings account.

• Charlie’s savings account will earn $102.65 more interest than Samantha’s savings account.

• Charlie’s savings account will earn $102.65 less interest than Samantha’s savings account.

• Charlie’s savings account will earn $12.35 more interest than Samantha’s savings account.

Tags

TEKS.MATH.8.12D