Compound Interest

A bank is offering 7% annual compound interest on a savings account. If you deposit $1,500, what will be the total amount of money in your savings account after 1 year?

• $105

• $1,605

• $1,717.35

• $300

When calculating interest, how do you write the percent?

• a fraction

• a decimal

• a whole number

• depends on the problem

Steve deposited $5,000 in a savings account that pays 4% interest compounded annually. Which formula could be used to find the value of the account after 3 years?

• A = 5,000(1 + 4)³

• A = 5,000(1 + 0.04)³

• A = 5,000(1 + 0.4) x 3

• A = 5,000(0.04)³

Garrison deposited $400 in an account that earns 5% compound interest. How much money will the account have altogether after 2 years?

• $440

• $40

• $41

• $441

Tags

CCSS.HSF.BF.A.2

The compound interest formula is:

A = P(1 + r)^t

What does the A represent?

• the amount of interest earned

• the amount of time that has passed

• the total amount of money in the account, including interest

• the amount required to invest

If $1,000 is invested at 3% compound interest, how much money will be in the account altogether after 2 years?

• $60.90

• $1,060.90

• $1,060

• The answer is not here.

Tags

CCSS.HSF-LE.A.1C

Interest is _________

• money paid or collected for borrowing money

• always given to you by the bank

• always bad

• always good

Tags

CCSS.7.RP.A.3

In the compound interest formula A=P(1+r)^t what does the P stand for?

• The time

• The total amount

• The principal amount (original amount)

• The interest rate

In the compound interest formula A=P(1+r)^t what does the A stand for?

• The amount of interest

• The total amount

• The interest rate

• The time

Jacob borrows $500 from Abraham and agrees to have the loan compounded annually for 5 years with an interest rate of 2.5%. How much will the total amount be that Jacob owes?

• $565.70

• $262609.38

• $65.70

• $630.20