Algebra II.3.D.26 - Percent Rate of Change – Exit Ticket

Last updated almost 4 years ago

4 questions

April would like to invest $200 in the bank for one year. Three banks all have a
nominal APR of 1.5%, but compound the interest differently.

Use the information to answer the following questions.

Bank A computes interest just once at the end of the year. What would April’s balance be after one year with this bank?

Bank B compounds interest at the end of each six-month period. What would April’s balance be after one year with this bank?

Bank C compounds interest continuously. What would April’s balance be after one year with this bank?

Each bank decides to double the nominal APR it offers for one year. That is, they offer a nominal APR of 3%. Each bank advertises, “DOUBLE THE AMOUNT YOU EARN!” For which of the three banks, if any, is this advertised claim correct?

From EngageNY.org of the New York State Education Department. Grade Algebra II Mathematics Module 3, Topic D, Lesson 26. Internet. Available from https://www.engageny.org/resource/algebra-ii-modul...; accessed 21/Apr/2016.