Compounding Interest Practice

What is the percent (%) of increase or decrease in the following function? f(x) = 3000 (1 + 0.4)^x

• Decrease by 4%

• Increase by 4%

• Increase by 40%

• Decrease by 40%

The following function represents a bank account. 
g(x) = 200(1.25)^x
What was the initial dollar amount put in the bank?

• $200

• $1.25

• $0.25

• $2.00

Which of the following functions shows an initial amount of $15 and an increase of 35% each year?

• y = 15(35)^x

• y = 15(1.35)^x

• y = 15(0.35)^x

• y = 35(1.15)^x

Mr. Jones has $410,000 in a retirement account that earns 3.85% compounded each year. Find the amount earned by this investment after 10 years.

• $598,203.38

• $426,061.30

• $411,578.50

• $411,581.24

Mona opened a savings account with a $500 deposit and a monthly compounded rate of 5.6%. If there were no deposits or withdrawals, how much money is in the account after 8.5 years?

• $803.92

• $524.37

• $520.18

• $310.98

When Melissa was born, her parents put $8000 into a college fund account that earned 9% compounded semi-annually. Find the total amount in the account after 18 years.

• $39,019.03

• $17,667.83

• $1,640.23

• $9,573.44

Malik deposited $1050 in a savings account that compounds quarterly. There is $1291.50 in the account after four years. Find the interest rate on Malik’s savings account.

• 5.2%

• 35.1%

• 38.5%

• 6.6%

In the TVM Solver, what does N represent?

• Total number of compounding periods

• Number of compounding periods per year

• Number of years

• Nachos

If interest is compounded by-weekly, how many times a year is that?

• 26

• 52

• 104

• 7

An Investment Annuity. Diego contributes to the Commercial National Money Market Account that earns 4.5% annual interest. What should his monthly payments be if he wants to accumulate $120,000 in 30 years?

• $200

• $157.43

• $172.90

• $150