Exponential Compounding Interest Word Problems

Caiden deposited $475 in an account that pays an interest rate of 3.8% compounded annually. What will be his balance after 15 years?

• $827.52

• $831.10

• $839.45

• $846.80

Krystal has $3000 invested at a 2% interest rate. Which expression can be used to determine how much money Krystal had after 16 years?

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

In the compound interest formula A=P(1+r)^t what does the P stand for?

• The time

• The total amount

• The principal amount (original amount)

• The interest rate

Which of the following exponential equations is the formula for compound interest compounded more than once a year?

• 
• 
• 
• 

What does the n stand for in this formula?

• Initial amount

• Final amount

• Rate

• Time

• The number of times compounded per year

Quarterly means how many times a year?

• 4

• 2

• 1

• 6

Semi-Annually means how many times a year?

• 4

• 2

• 1

• 6

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

Which formula is shown?

• Compounded n times per year

• Compounded continously