Simple and Compound Interest/Rule of 72

Which of the following is the correct formula for calculating Simple Interest?

• I=P+R+T

• I=PRT

• A=I+P

Tags

CCSS.7.RP.A.3

Which of the following is the correct formula for calculating the Future Value (A) of a Compound Interest investment?

• A=PRT

• A=P+I

• A=I/RT

If an investment is compounded Quarterly, what is the value of the compounding frequency (n) per year?

• 1

• 2

• 4

• 12

How often is an investment compounded per year if it is compounded Monthly?

• 4

• 6

• 10

• 12

If $3,200 is invested for 9 months at an annual rate of 5% simple interest, what is the amount of simple interest earned?

• $480.00

• $160.00

• $120.00

• $1,440.00

Tags

CCSS.7.RP.A.3

Using the investment from Question 5 ($3,200 invested for 9 months at 5% simple interest), what is the total amount at the end of the term?

• $3,200.00

• $3,320.00

• $3,360.00

• $3,680.00

Tags

CCSS.7.RP.A.3

How long will it take to earn 500 simple interest, investing 8,500 at a rate of 4.25% per year?

• Approximately 2.76 years

• Approximately 1.39 years

• Approximately 1.05 years

• Approximately 0.53 years

Tags

CCSS.6.EE.B.6

Kim has to invest for years. Assuming all investments are equally secure, which of the following options will yield the highest total amount?

• Annually

• Quarterly

• Monthly

• Daily

Colin invests $5,000 for 5 years at 5.25%. How much more would he collect at the end of the 5-year period if the money is compounded monthly rather than compounded annually?

• $39.42

• $28.75

• $5.00

• $21.46

An amount of $8,000 is invested for a period of 8 months at 2% compounded monthly. In this scenario, what would be the correct value for the time in years (t) in the compound interest formula?

• 8

• 0.8

• 2/3 (or 0.667)

• 12