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Compound Interest

Total questions: 15

Worksheet time: 33mins

Name
Class
Date
1.

$2000 is deposited at 12% per year, compounded continuously. Find the balance after 7 years.

a)

$4572.89

b)

$4632.73

c)

$3789.76

d)

$5214.89

2.
Your 6 year investment of $40,000 at 14% interest compounded annually is worth how much now?
a)
$47,798.90
b)
$87,798.90
c)
$127,798
d)
$7,798
3.

Your $440 gets 5.8% interest compounded annually for 8 years. What will your $440 be worth in 8 years?

a)

$250.78

b)

$690.78

c)

$1,130

d)

$940.78

4.

What do the variables stand for in this equation?

a)

A=Amount

P=Principle

R=Return

T=Time

b)

A=Amplitude

P=Principle

R=Return

T=Time

c)

A=Amount

P=Principle

R=Rate

T=Time

5.

The 1985 population estimate for India was 766 million, and the population has been growing continuously at a rate of about 1.82% per year. Assuming that this rapid growth rate continues, estimate the population N(t) of India in the year 2045 (Round you answer to the nearest million).

a)

2,283,000,000

b)

2,463,000,000

c)

1,876,000,000

d)

2,321,000,000

6.
Riley invested $1,000 in savings bonds. If the bonds earn 6.75% interest compounded semi-annually, how much total will Riley earn in 15 years?
a)
$1,584.62
b)
$2,651.39
c)
$2,706.86
d)
$1,825.10
7.

What does the n stand for in this formula?

a)

Initial amount

b)

Final amount

c)

Rate

d)

Time

e)

The number of times compounded per year

8.

What does the n stand for in this formula?

a)

Initial amount

b)

Final amount

c)

Rate

d)

Time

e)

The number of times compounded per year

9.

If you deposit $5000 into an account paying 6% annual interest compounded monthly, how long until there is $8000 in the account?

a)

About 8.1 years

b)

About 7.8 years

c)

About 8 years

d)

About 7.9 years

10.

At 3% annual interest compounded monthly, how long will it take to double your money?

a)

Around 19.6 years

b)

Around 17.4 years

c)

Around 23.1 years

d)

Around 18.6 years

11.
Karla invested $1,000 in savings bonds. If the bonds earn 6.75% interest compounded semi-annually, how much total will Karla earn in 15 years?
a)
$1,584.62
b)
$2,651.39
c)
$2,706.86
d)
$1,825.10
12.
Principal: $999
Interest Rate: 5.45%
Time: 19 years
Compounded Quarterly
State the future account balance.
a)
$2794.10
b)
$2738.11
c)
$2774.98
d)
$2807.11
13.
Semi-Annually means how many times a year?
a)
b)
2
c)
1
d)
6
14.
When the Compound interest is compounded half yearly the time is taken as____
a)
2n
b)
n⁄2
c)
n2
d)
n+2
15.
To earn as much interest as possible, you should open a savings account that earns ______ interest and has the _____ interest rate.
a)
compound; lowest
b)
simple ; lowest
c)
compound ; highest
d)
simple ; highest