Mastering Compound Interest: Calculate & Time It Right

A bank offers a savings account with an annual interest rate of 5% compounded annually. If you deposit $1,000, how much will you have in the account after 3 years?

• 1050.75

• 1200.00

• 1157.63

• 1100.50

You invest $2,000 in a certificate of deposit (CD) that pays 4% interest compounded quarterly. How much will you have after 5 years?

• $2,000.00

• $2,440.38

• $2,500.00

• $2,200.50

If you want to have $5,000 in your account after 10 years and the bank offers a 6% annual interest rate compounded annually, how much do you need to deposit now?

• 2784.80

• 3500.75

• 2500.00

• 3000.50

A loan of $1,500 is taken out at an interest rate of 7% compounded semi-annually. What will be the total amount owed after 4 years?

• 1800.75

• 1974.11

• 2100.50

• 1500.00

You plan to save $3,000 for a vacation in 2 years. If your savings account earns 3% interest compounded monthly, how much will you have saved by the time you go on vacation?

• $3,100.00

• $3,185.03

• $2,500.00

• $3,500.00

If you invest $4,000 in a fund that earns 8% interest compounded annually, how much will you have after 6 years?

• 5000.00

• 7000.00

• 6347.50

• 8000.00

A student takes a loan of $2,500 at an interest rate of 5% compounded annually. How much will the student owe after 3 years?

• $3,000.00

• $2,500.00

• $2,750.00

• $2,894.06

You want to accumulate $10,000 for a car in 5 years. If your investment earns 9% interest compounded annually, how much do you need to invest today?

• 7000.50

• 6513.93

• 5000.00

• 8000.00

A company invests $15,000 in a project that yields 10% interest compounded quarterly. What will be the total amount after 3 years?

• 22000.00

• 18000.00

• 15000.00

• 20173.35

If you have $1,200 in a savings account that earns 2% interest compounded monthly, how much will you have after 1 year?

• $1,224.23

• $1,150.50

• $1,300.00

• $1,200.00