Exploring Compound Interest Concepts

What does compound interest include?

• Interest on the principal only

• Interest on the principal at a fixed rate

• Interest on the principal and previously earned interest

• Interest on the principal and future interest

What is the formula for calculating compound interest?

• A = P + rt

• A = P(1 + r/n)^nt

• A = P(1 + r)^nt

• A = P(1 + r/n)

How do you convert a percentage to a decimal for calculations?

• Move the decimal point two places to the left

• Divide by 100

• Multiply by 100

• Move the decimal point two places to the right

What does the variable 'n' represent in the compound interest formula?

• Initial principal amount

• Total interest rate

• Number of years

• Number of times interest is compounded per year

What is the compounding frequency if the interest is compounded quarterly?

• 2 times a year

• 12 times a year

• 4 times a year

• Once a year

If interest is compounded semi-annually, how many times per year is it compounded?

• 2

• 12

• 4

• 24

How often is interest compounded if it is done weekly?

• 26 times a year

• 12 times a year

• 52 times a year

• 365 times a year

What would be the balance after 18 years if $2000 is deposited at an interest rate of 4.5% compounded quarterly?

• $4000.00

• $5000.00

• $4500.00

• $4475.53

Calculate the final amount for a principal of $12,000 at 4.8% interest compounded annually after 7 years.

• $16,661.35

• $15,000.00

• $18,000.00

• $20,000.00

What would be the balance after 10 years if $310 is deposited at an interest rate of 15% compounded monthly?

• $1,000.00

• $1,200.00

• $1,500.00

• $1,376.47