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May 1: Compound Interest #2

Total questions: 33

Worksheet time: 6hrs 40mins

Name
Class
Date
1.
Semi-Annually means how many times a year?
a)
4 
b)
2
c)
1
d)
6
2.
Monthly means how many times a year?
a)
4 
b)
12
c)
52
d)
365
3.

Bruno was given $2000 when he turned 3 years old. His parents invested it at a 2% interest rate compounded annually. Which expression can be used to determine how much money Bruno had in the account when he turned 16?

a)

2000(1+0.02)13

b)

2000(1+0.02)-13

c)

2000(1+0.02)16

d)

2000(1+0.02)3

4.

Emily's parents put $1,500 in her bank account for college tuition. At an interest rate of 8.25% compounded semi-annually, what will be the balance after 3 years?

a)

$2,273.50

b)

$1,514.08

c)

$2,040.23

d)

$1,911.70

5.
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
6.
Jay'den earned $475 from mowing lawns last summer. He deposited this money in an account that pays an interest rate of 3.8% compounded annually. What will be his balance after 15 year?
a)
$827.52
b)
$831.10
c)
$839.45
d)
$846.80
7.
Courtney saved up $2,200 working as a waitress over the summer. She put this money into a bank account that earned 5.2% interest and is compounded daily. How much will she have in her account at the end of 4 years?
a)
$2201.25
b)
$2694.55
c)
$2707.45
d)
$2708.63
8.

Riley will have $2,706.86 in a savings bonds. If the bonds earn 6.75% interest compounded semi-annually, how much will Riley have to invest to earn this amount in 15 years?

a)

$1,584.62

b)

$2,651.39

c)

$1,000.00

d)

$1,825.10

9.

Heather invested in a 4-year Certificate of Deposit (CD) that pays 4.1% interest compounded annually. How much will she have to invest into the CD, at the end of the 4 years, if $9,394.92 will be earned?

a)

$8,000.00

b)

$9,312.00

c)

$1394.00

d)

$1312.00

10.

Steve wants to have $5,000, after 3 years, in a savings account that pays 4% interest compounded annually. Which equation could be used to find the value he needs to have in the account?

a)

P = 5,000(1 + 4)-3

b)

P = 5,000(1 + 0.04)-3

c)

P = 5,000(1 + 0.4) x -3

d)

A = 5,000(1 + 0.04)3

11.

If an investment that pays 7.8% for 3 years is being compounded bi-weekly, what will the adjusted interest be, as a decimal, and how many compounding periods are there.

a)

0.078 and 26

b)

0.78 and 26

c)

0.003 and 78

d)

0.3 and 78

12.

Weekly means how many times a year?

a)

4

b)

7

c)

26

d)

52

13.

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?

a)

$915.59

b)

$933.28

c)

$979.81

d)

$1,005.09

14.
Katie invested $6,500 in a savings account earning 12% interest compounded quarterly.  What is the future value of this investment after five years? Round your answers to the nearest cent. 
a)
$1,235,322.65
b)
$6,895.85
c)
$11,739.72
d)
$6,901.32
15.

Riley invested $1,000 in savings bonds. If the bonds earn 6.75% interest compounded semi-annually,how much interest will Riley earn in 15 years?

a)

$1,584.62

b)

$1,651.39

c)

$1,706.86

d)

$1,893.45

16.

Zach's parents put $1,500 in her bank account for college tuition. At an interest rate of 8.25% compounded semi-annually, what will be the balance after 18 years?

a)

$6,273.50

b)

$6,314.08

c)

$6,385.72

d)

$6,427.94

17.

Treasure 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 total will she earn in 10 years?

a)

$4915.59

b)

$3933.28

c)

$2979.81

d)

$4005.09

18.
Money available at the present time (today) is worth more than the same amount if received in the future
a)
Pay Yourself First
b)
Time Value of Money
19.
Portion of income not spent on consumption
a)
Consumption
b)
Savings
20.
The original amount of money saved or invested
a)
Interest
b)
Principal
21.

Putting money for yourself aside before paying bills

a)

Do It Yourself

b)

Pay Yourself First

22.
How quickly and easily assets can be accessed and converted into cash
a)
Liquidity
b)
Compound Interest
23.
Cash set aside to cover the cost of unexpected events
a)
Time Value of Money
b)
Emergency Savings
24.
When you complete a task yourself rather than paying someone else
a)
Do It Yourself
b)
Pay Yourself First
25.
Percentage rate used to calculate interest
a)
Compound Interest
b)
Interest Rate
26.

Earning interest on interest

a)

Interest

b)

Compound Interest

c)

Time Value of Money

d)

Saving

27.
Principal: $5000
Interest Rate: 3.75%
Time: 25 years
Compounded Monthly
State the future account balance.
a)
$12712.31
b)
$12,749.30
c)
$12,657.59
d)
$12550.84
28.

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

29.

What does the r stand for in this formula?

a)

Initial amount

b)

Final amount

c)

Rate

d)

Time

e)

The number of times compounded per year

30.

What does the P stand for in this formula?

a)

Initial amount

b)

Final amount

c)

Rate

d)

Time

e)

The number of times compounded per year

31.

Karla invested $1,000 in savings bonds. If the bonds earn 6.75% interest compounded semi-annually.


Which exponential equation can be used to find how much money Karla will earn in 15 years?

a)
b)
c)
d)
32.
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
33.

Find the balance in the account after the given period.

$12,000 principal earing 4.8% compounded annually after 7 years.

a)

$3,243.19

b)

$16,661.35

c)

$15,243.19

d)

$4,661.35