Test review Simple and Compound Interest

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.

Tags

CCSS.7.RP.A.3

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 in an account with Simple Interest?

Back

Total Amount = Principal + Simple Interest. Simple Interest can be calculated using the formula: I = P * r * t.

Tags

CCSS.7.RP.A.3

Front

How do you calculate the total amount in an account with Compound Interest?

Back

Total Amount = Principal * (1 + r/n)^(nt). This includes both the principal and the interest earned.

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 of interest, and t is the time in years.

Tags

CCSS.7.RP.A.3

Front

What is the formula for calculating Compound Interest?

Back

A = P(1 + r/n)^(nt), where A is the total amount, P is the principal, r is the annual interest rate, n is the number of times interest is compounded per year, and t is the number of years.

Front

If Kaelynn invests $15,000 at 4% simple interest for 3 years, how much interest does she earn?

Back

$1,800.

Tags

CCSS.7.RP.A.3

Front

If Gael deposits $650 at 3.5% simple interest for 2 years, what is the total balance?

Back

$695.50.

Tags

CCSS.7.RP.A.3

Front

After 8 years, who has more money: Sarah with 2% compound interest or Claire with 2% simple interest on $800?

Back

Sarah's account will have about $9.33 more than Claire's account.

Front

How much interest will Juan pay on a $27,000 loan at 4.15% compounded annually for 5 years?

Back

$6,087.21.