Comparing Simple and Compound Interest

What type of interest earns on both the principal and the accumulated interest?

• Variable interest

• Compound interest

• Fixed interest

• Simple interest

After three years, who earned more interest, Adam or Britt?

• Adam

• Britt

• Cannot be determined

• Both earned the same

How much more did Britt earn than Adam after three years?

• $788.13

• $38.13

• $38

• $750

Over 30 years, how much more does compound interest earn compared to simple interest?

• $47,434.91

• $18,000

• $13,965.58

• $29,434.91

What is the effect of time on the difference between simple and compound interest?

• No effect

• Decreases over time

• Increases over time

• Varies unpredictably

At a 10% interest rate, what is the difference in earnings between simple and compound interest?

• $16,772.48

• $15,000

• $31,772.48

• $10,789.28

Which type of interest consistently earns more across different interest rates?

• Both earn the same

• Compound interest

• Depends on the principal amount

• Simple interest

What formula is used to calculate simple interest?

• I = P + rt

• A = P(1 + r)^t

• I = Prt

• A = P(1 + rt)

For the compound interest account, what was the total value after 5 years?

• $6,000

• $6,083.26

• $1,083.26

• $5,000

What is encouraged for further understanding of simple and compound interest?

• Memorizing formulas

• Practical application

• Additional practice problems

• Watching more videos