Simple and Compound Interest

Smithville Bank is offering each of it's customers a record 3.4% interest on new savings account. If Mr. Thomas opens an account with $1,500, how much interest will he earn in 3 years?

• $15,300
• $1,530
• $153
• The answer is not shown

Which is the formula for Simple Interest?

• $I\ =\ P\cdot R\cdot T$

• $A=P\left(1+\frac{r}{n}\right)^{n\cdot t}$

Which is the formula for Compound Interest?

• $I\ =\ P\cdot R\cdot T$

• $A=P\left(1+\frac{r}{n}\right)^{n\cdot t}$

Use simple interest to find the ending balance. (Total = P + I)

P= $34,100 R= 4% T= 3 years

• $4,092

• $5030

• $38,192

• $41,100

If Sam borrows $210 for 7 years at an interest rate of 8%, how much interest will he pay?

• $327.60

• $805.00

• $1015.00

• $117.60

You want to borrow $1,240 for 2 years at an interest of 8% compounded annually. How much will you pay back by taking out the loan?

• $4464

• $1,186.30

• $1,446.34

• $2,215.68

Carly

deposited $800 in an account that earns 6% compounded annually. Lara deposited

$800 in an account that earns 6% simple interest. How much will each girl have

in their account at the end of 10 years if they make no withdrawals or deposits?

• Carly: $1432.68 Lara: $1280

• Carly: $1444.89 Lara: $1280

• Carly: $1444.89 Lara: $1320

• Carly: $1432.68 Lara: $1320

When calculating

interest, how do you write the percent?

• a fraction

• a decimal

• a round number

• not enough information

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

Heather

invested $8,000 in a 4-year Certificate of Deposit (CD) that pays 4.1% interest

compounded annually. What is the value of the CD at the end

of the 4 years?

• $9,394.92

• $9,312.00

• $1394.00

• $1312.00