Compound Interest and Logarithms

Compound Interest and Logarithms

Assessment

Interactive Video

Mathematics

9th - 10th Grade

Hard

Created by

Thomas White

FREE Resource

The video tutorial explains how to use the compound interest formula to determine the time required for an investment to double in value. It breaks down the formula, calculates the interest rate per compounding period, and uses logarithms to solve for the time variable. The example involves a $1,000 investment at a 12% annual interest rate, compounded annually, and demonstrates that it takes approximately 6.143 years for the investment to reach $2,000.

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15 questions

Show all answers

1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the main objective of the problem discussed in the video?

To understand the concept of simple interest

To determine the time required for an investment to double

To find the interest rate for a given investment

To calculate the future value of an investment

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the first step in solving the compound interest problem?

Calculating the future value

Breaking down the formula

Setting up the equation

Finding the interest rate

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which of the following is NOT a component of the compound interest formula?

Principal amount

Interest rate

Compounding period

Dividend yield

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

In the compound interest formula, what does 'N' represent?

The principal amount

The interest rate

The number of compounding periods

The future value of the investment

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What does the variable 'A' represent in the compound interest formula?

The future value of the investment

The interest rate

The number of compounding periods

The initial investment

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

How is the annual interest rate of 12% expressed as a decimal in the formula?

12.0

0.12

1.2

0.012

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the principal amount used in the example?

$2,000

$500

$1,000

$1,500

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