Simple and Compound Interest

Anne deposited $500 in an

account that earns 6% simple annual interest.

Shelly deposited $500 in an account that earns 6% annual interest

compounded annually. They leave the

money in the account for 4 years. Which

statement is true about the two investments after 4 years?

• Shelly will have $131.24 more in her account

  than Anne has in her account.

• They will have the same

  amount in their accounts.

• Shelly will have $11.24 more

  in her account than Anne has in her account.

• Anne will have $11.24 more in

  her account than Shelly has in her account.

Tags

CCSS.7.RP.A.3

CCSS.7.EE.B.3

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

Tags

CCSS.7.RP.A.3

When calculating

interest, how do you write the percent?

• a fraction

• a decimal

• a round number

• not enough information

Tags

CCSS.7.RP.A.3

CCSS.7.EE.B.3

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

Tags

CCSS.7.RP.A.3

CCSS.7.EE.B.3

CCSS.7.EE.B.4

Jared

invests $10,000 in a savings account that pays 3% simple interest. How many years will it take for the account

to grow to $12,700, if he makes no withdrawals or deposits?

• 7 years

• 12 years

• 9 years

• 22 years

Tags

CCSS.6.EE.B.7

Karl used his credit card to buy a 90-inch HD flat-screen TV for $2,600. The credit card company charges 28% compound interest per year. If Karl made no payments for 2 years, how much would he owe the credit card company?

• $5,069.84

• $4,772.18

• $4,259.84

• $4,056.00

Tags

CCSS.7.RP.A.3

CCSS.7.EE.B.3

The simple interest formula is I=Prt.  What does the t represent?

• Principle
• Interest
• Time
• Percent Rate

Tags

CCSS.7.RP.A.3

Find the total amount in the account to the nearest cent if the interest is compounded annually. 
$2750 at 8% for 2 years

• $220
• $440
• $660

Tags

CCSS.HSF-LE.A.1C

The simple interest formula is I=Prt. The P represents the principle. The principle is ___________________.

• the original amount of money borrowed or deposited

• the percent interest for his year

• the amount taxed

• the amount the bank owes you for being a customer at their bank

Tags

CCSS.7.RP.A.3

Emilio borrows $1200 from a bank with 8% simple interest per year.  How much will he have to pay back total in 2 years?

• $150
• $192
• $1350
• $1392

Tags

CCSS.7.RP.A.3