Compound & Simple Interest Warm-Up

Paul deposits $4000 in a bank which pays a compound interest rate of 4% per year. How much will he have in 5 years.

What formula(s) should you use to solve this?

Select all that apply.

• A = P(1+r)^t

• I = Prt

• P + I = A

• a² + b² = c²

Paul deposits $4000 in a bank which pays a compound interest rate of 5% per year. How much will he have in 7 years?

What is the question asking for?

• Principal

• Interest

• Amount Accumulated

• Time

Mr Tom borrowed $2000 from a bank. The bank charges a simple interest of 7% per annum. Calculate the interest that he has to pay at the end of 3 years.

What formula(s) should you use to solve this?

Select all that apply.

• A = P(1+r)^t

• I = Prt

• P + I = A

• a² + b² = c²

Mr Tom borrowed $2000 from a bank. The bank charges a simple interest of 7% per annum. Calculate the interest that he has to pay at the end of 3 years.

What is the question asking for?

• Principal

• Interest

• Amount Accumulated

• Time

Find the simple interest earned when the principal is $500 at a rate of 10% held in the bank for 8 months.

What formula(s) should you use to solve this?

Select all that apply.

• A = P(1+r)^t

• I = Prt

• P + I = A

• a² + b² = c²

Find the simple interest earned when the principal is $500 at a rate of 10% held in the bank for 8 months.

What is the question asking for?

• Principal

• Interest

• Amount Accumulated

• Time

Find the simple interest earned when the principal is $500 at a rate of 10% held in the bank for 8 months.

What should you plug in for r ?

• 10%

• 10

• $\frac{10}{100}$

• 8

• 500

Mr Tom borrowed $2000 from a bank. The bank charges a simple interest of 7% per annum. Calculate the interest that he has to pay at the end of 3 years.

What should you plug in for r ?

• 7%

• 7

•  $\frac{7}{100}$ 

• 3

• 2000

Ms. Pierson is working on a compound interest question. This is her work:

 $A=400\left(1+\frac{3}{100}\right)7$  

Is this correct?

• Yes, it looks good.

• No, she made a mistake :(

Ms. Pierson is working on a compound interest question. This is her work:

 $A=400\left(1+3\%\right)^7$  

Is this correct?

• Yes, it looks good.

• No, she made a mistake :(