ACP Simple & Compound interest Review

Front

What is Simple Interest?

Back

Simple Interest is calculated using the formula: I = P * r * t, where I is the interest, P is the principal amount, r is the rate of interest per year, and t is the time in years.

Front

What is Compound Interest?

Back

Compound Interest is calculated on the initial principal and also on the accumulated interest from previous periods. The formula is A = P (1 + r/n)^(nt), where A is the amount of money accumulated after n years, including interest, P is the principal amount, r is the annual interest rate, n is the number of times that interest is compounded per year, and t is the number of years.

Front

How do you calculate the total amount with Simple Interest?

Back

Total Amount = Principal + Simple Interest. Use the formula: A = P + (P * r * t).

Front

How do you calculate the total amount with Compound Interest?

Back

Total Amount = Principal * (1 + r/n)^(nt).

Front

What is the formula for calculating Simple Interest?

Back

I = P * r * t, where I is the interest, P is the principal, r is the rate, and t is the time.

Front

What is the difference between Simple Interest and Compound Interest?

Back

Simple Interest is calculated only on the principal amount, while Compound Interest is calculated on the principal plus any interest that has already been added.

Front

If you deposit $5,400 at a 6.9% simple interest rate for 12 years, how much interest will you earn?

Back

$4,471.30.

Front

If you borrow $11,000 at 4.5% simple interest for 3 years, how much interest will you pay?

Back

$1,072.50.

Front

What is the interest earned on a $970 deposit at 5.8% compounded annually after 13 years?

Back

$1,307.82.

Front

How much interest does an $8,000 deposit earn at 4% simple interest over 12 years?

Back

$3,840.