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Continuous Interest and Principal Amounts

Continuous Interest and Principal Amounts

Assessment

Interactive Video

Mathematics, Science, Business

9th - 12th Grade

Practice Problem

Hard

Created by

Emma Peterson

FREE Resource

The video tutorial explains how to calculate continuous interest on a bank deposit. It introduces the continuous interest formula, which is simpler than the compounded interest formula. The formula is applied to determine the account balance after a specified number of years. Examples include calculating the balance after two and ten years using a principal of $1,500 and an interest rate of 4%. The video concludes with a preview of the next tutorial, which will cover determining the time required to reach a specific account balance.

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8 questions

Show all answers

1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the principal amount deposited in the bank?

$2,000

$2,500

$1,500

$1,000

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the annual interest rate expressed as a decimal for a 4% interest rate?

0.004

0.04

0.4

4.0

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

In the continuous interest formula, what does 'P' represent?

Amount after T years

Annual interest rate

Principal amount

Time in years

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the formula for continuous interest?

A = P(1 + r/n)^(nt)

A = P * E^(RT)

A = P(1 + r)^t

A = P * (1 + RT)

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the account balance after two years?

$1,624.18

$1,700

$1,560

$1,500

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which calculator function is used to calculate 'E' raised to a power?

Log

Natural Log

Second

Exponent

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the account balance after ten years?

$2,100

$2,500

$2,000

$2,237.74

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