NEW
Font size
WorksheetsCompound Interest
Total questions: 23
Worksheet time: 2hrs 39mins
What is the correct definition of interest?
money paid to you by a bank for the money you have in a bank account
put into a bank account
to borrow something
In some investment accounts interest is computed on interest that has been earned in previous years. What is this method of computing interest called?
compound interest
double interest
simple interest
not enough information
What does the r stand for in this formula?
Initial amount
Final amount
Rate
Time
The number of times compounded per year
What does the P stand for in this formula?
Initial amount
Final amount
Rate
Time
The number of times compounded per year
What does the n stand for in this formula?
Initial amount
Final amount
Rate
Time
The number of times compounded per year
When calculating
interest, how do you write the percent?
a fraction
a decimal
a round number
not enough information
the time has to be in _____________
years
months
days
seconds
Steve deposited
$5,000 in a savings account that pays 4% interest compounded annually. Which
equation could be used to find the value of the account after 3 years?
A = 5,000(1 + 4)3
A = 5,000(1 + 0.04)3
A = 5,000(1 + 0.4) x 3
A = 5,000(0.04)3
Interest Rate: 3.75%
Time: 25 years
Compounded Monthly
State the future account balance.
Interest Rate: 5.45%
Time: 19 years
Compounded Quarterly
State the future account balance.
Heather
invested $8,000 in a 4-year Certificate of Deposit (CD) that pays 4.1% interest
compounded annually. What is the value of the CD at the end
of the 4 years?
$9,394.92
$9,312.00
$1394.00
$1312.00
Mark took a loan out for $25,690 to purchase a truck. At an interest rate of 5.2% compounded monthly, how much total will he have paid after 5 years?
$33,299.42
$33,672.68
$34,157.04
$34,710.88
Olivia would like to buy some new furniture for her home. She decides to buy the furniture on credit with 9.5% interest compounded quarterly. If she spent $7,400, how much total will she have paid after 8 years?
$15,415.94
$15,683.28
$15,927.56
$16,349.72
Kennedy won $3,000 from a radio contest. If she puts this money in a bank account that earns 2.9% interest compounded quarterly, how much interest will she earn in 10 years?
$915.59
$933.28
$979.81
$1,005.09
Which investment would have a larger balance after 5 years?
Option 1 - 4% compounded monthly
Option 2 - 3.9% compounded daily.
Town Bank offers a 2.25% interest rate, while Charter One offers 2.8%. Both banks compound interest annually. If Rob wants to set up a new account with $5,000,how much more money will he earn at Charter One over Town Bank after 25 years?
$1,183.41
$1,209.79
$1,251.63
$1,324.10
