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TEK 8.12D - Compound Interest

Last updated over 2 years ago

12 questions

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TEK 8.12D

Question 1

1.

Question 2

2.

Question 3

3.

Question 4

4.

Question 5

5.

Question 6

6.

Question 7

7.

Question 8

8.

Question 9

9.

Question 10

10.

Question 11

11.

Question 12

12.

If you invest $500 in a savings account that has an annual interest rate of 4% compounded annually, what will the amount be after 3 years?

$562.43

$560

$520

$600

A $200 investment is compounded quarterly at an annual interest rate of 3% for 2 years, what will be the final amount?

$215

$220

$212.36

$212

You invest $1000 at a 5% annual interest rate compounded yearly. What will be the total amount after 1 year?

$1020

$1100

$1050

$1080

How much will $300 grow to after 5 years if it’s invested at a compounding annual interest rate of 10%?

$450

$500

$600

$483.19

Which statement best describes compound interest?

Interest is calculated only on the initial principal

Compound interest is taxed more heavily than simple interest

Compound interest is the same as simple interest

Interest is calculated on the initial principal & any accumulated interest

What is the key difference between simple and compound interest?

Simple interest is calculated based on principal and interest

Compound interest is calculated based on principal and interest

There isn't a difference

Compound interest involves more money initially

If you were investing a lump sum for a long period, which type of interest would be best for growth?

Simple interest

Neither provides any growth

Both are equally beneficial

Compound interest

What happens to the amount of interest you earn each year with compound interest?

It depends on the investment firm

It stays constant

It can increase each year

It reduces each year

If you borrow $2,000 at an annual compound interest rate of 5%, how much will you owe after 5 years?

$2,552.56

$2,000

$2,500

$552.56

What will $3,000 grow to in two years with an annual compounding rate of 4%?

$3,244.80

$3,100

$75,000

$244.80

Jack deposits $500 in a bank with an annual interest rate of 3%, compounded annually. What will the total be after 3 years?

$552.36

$545

$546.36

$600

If the principal is $4000, compounded annually at a rate of 6% and the time is 3 years, what is the amount of interest?

$4764.06

$4720

$720

$764.06