Worksheetscompound interest word problems
Total questions: 12
Worksheet time: 26mins
What does each letter represent
If you invest $1,000 at 5% interest for 45 years you end up with (a)
A = 1000 (1 + 0.05) ^45
Round to 100th spot. Use $ , .
If you invest $2,500 at 1% interest for 13 years you end up with...
A = 2500 (1 + 0.01) ^13
Round to 100th spot. Use $ , .
(a)
$125 invested at 4% for 60 years
Round to 100th spot. Use $ , .
(a)
$750 at 7% for 15 years
Round to 100th spot. Use $ , .
(a)
$10,000 at 6% for 35 years
Round to 100th spot. Use $ , .
(a)
Let's try it with an example. Thanks Chat GPT: Olivia receives $500 for her 16th birthday. She considers spending it on a llama costume for her dog, complete with gold reins and LED hooves. But after a long talk with her future self in a dream (who wore a business suit and smelled vaguely of success), Olivia instead decides to invest the full $500 in a compound interest account that earns 10% annually, compounded yearly.
She forgets about it entirely—too distracted by her TikTok fame and dog cosplay empire—and checks the account 30 years later, at age 46.
How much money does Olivia have now, and could it finally be enough to buy that deluxe llama costume in every color?
What is different about this scenario?
Olivia spots the perfect llama costume for her dog online: it glows in the dark, neighs when you press the hooves, and costs exactly $500. She doesn’t have the cash, but no problem! She charges it to her credit card, which has a 10% annual interest rate, compounded yearly. She decides she'll “deal with it later.”
Unfortunately, "later" turns into 30 years because Olivia forgets all about the costume—and the debt. No payments. No interest-only payments. Just... llama silence.
How much does she owe now for that glowing dog costume?
the number of years it collected interest
the initial cost of the llama costume
the interest rate
how often the account compounds annually
whether Olivia receives or owes the $8,724.70
Jayden takes the $1,000 he won in a regional juice box–chugging contest (don’t ask) and decides to invest it in a high-yield account that earns 8% interest annually, compounded quarterly. He’s 18 years old and plans to leave the money untouched until he’s 30, at which point he hopes to use it to open a juice-themed café called “Capri Capital.”
How much money will Jayden have when he’s 30?
Round to the 100th spot like money. Include $ , .
(a)
True story, ChatGPT actually messed up and "corrected" my mistake. Good thing I knew the math and could push back. It took a couple tries for it to admit its mistake. Where did it FIRST go wrong?
Amara inherits $10,000 from her great-uncle, a retired Roman reenactor who once ran a chariot-racing fan club. She’s tempted to spend it all building a mini Colosseum in her backyard—but decides instead to invest the full $10,000 in a mutual fund that earns 6% annual interest, compounded monthly.
She leaves the money untouched for 20 years, planning to finally cash it out to build an amphitheater for her future backyard drama troupe.
(a)
Theo is convinced time travel will be real by 2050. To prepare, he invests $5,000 in a long-term fund earning 7% annual interest, compounded semiannually (twice per year). He plans to leave it alone for 25 years, at which point he’ll (hopefully) use the money to buy the first time-traveling tablet on the market.
How much money will Theo have after 25 years?
(a)
