Calculating the Starting Principal in Compound Interest

What is the purpose of using the compound interest formula in this scenario?

• To calculate the interest earned over 90 months

• To determine the initial amount invested

• To find out the total interest rate

• To understand the effects of semi-annual compounding

What does the final amount of $6000 represent in the context of this problem?

• The annual interest payment

• The total interest earned

• The principal amount

• The accumulated amount after 90 months

What is the annual interest rate used in the calculation?

• 4.25%

• 2.125%

• 8.5%

• 6%

How many times per year is the interest compounded?

• Semi-annually

• Monthly

• Quarterly

• Annually

How many years correspond to 90 months?

• 7.5 years

• 9 years

• 8 years

• 10 years

What is the formula used to adjust the interest rate for the number of compounding periods?

• Interest rate - number of periods

• Interest rate + number of periods

• Interest rate * number of periods

• Interest rate / number of periods

What is the value obtained by raising 1.02125 to the 15th power?

• 1.250822

• 1.5

• 1.321022

• 1.370822

What mathematical operation is performed to isolate the principal on one side of the equation?

• Division

• Multiplication

• Addition

• Subtraction

What is the approximate value of the principal calculated from the given data?

• $4800

• $4000

• $4376.94

• $4500

What does the result of the calculation tell us about the initial investment?

• It was less than $4400

• It was exactly $4400

• It was significantly more than $4400

• It was more than $4400 but close to it