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- 1. Multiple Choice
In the compound interest formula A=P(1+r)t what does the A stand for?
The amount of interest
The total amount
The interest rate
The time
- 2. Multiple Choice
In the compound interest formula A=P(1+r)t what does the P stand for?
The time
The total amount
The principal amount (original amount)
The interest rate
- 3. Multiple Choice
Jacob borrows $500 from Abraham and agrees to have the loan compounded annually for 5 years with an interest rate of 2.5%. How much will the total amount be that Jacob owes?
$565.70
$262609.38
$65.70
$630.20
- 4. Multiple Choice
Hei-Hei has $1500 in a retirement account earning 5% interest compounded annually. After 5 years how much does Hei-Hei have in the account?
$1750
$2010.14
$2500
$1914.42
- 5. Multiple Choice
Henry deposits $750 into a college savings account that is compounded annually when his parents received as a stimulus package. If Henry lets the money sit in the account without adding or removing any and receives a 8.5% interest rate, how much money will he have total after 5 years?
$1127.74
$1535.24
$2345.67
$850.76
- 6. Multiple Choice
If you wanted to amount of interest an account has earned after being compounded annually. What would you have to do after you found "A" using the formula A=P(1+r)t ?
Add A (total amount) plus P (original amount)
Subtract A (total amount from P (original amount)
Add P (original amount) plus A (total amount)
Subtract P (original amount) from A (total amount)
- 7. Multiple Choice
Julia invested $1000 for college in an account earning 5% compounded annually. When she checked the account after 4 years, how much money did she find in the account?
Not enough
$563.24
$1215.51
$3200.12
- 8. Multiple Choice
Trevor wants to have $4000 saved up in 3 years for a car. If he invests $1500 in a savings account that is compounded annually at an interest rate of 12%, will he have enough money at the end of the 4 years?
Yes
No
- 9. Multiple Choice
Chris borrows $450 from Gavin. Gavin lets Chris choose either a simple interest loan for 10 years with a 3.5% interest rate or a loan compounded annually for 7 years with a 2% interest rate. Which should Chris choose if he wants the cheaper plan? Use I=P*r*t for simple interest (make sure to add I plus P at the end) and A=P*(1+r)t for compound interest.
The simple interest plan
The compound interest plan
- 10. Multiple Choice
Daniel invests $360 in a bank account that is compounded annually for 8 years with an interest rate of 5.5%. What will be the total amount in the account after the 8 years is over?
$625.88
$950.12
$315.45
$552.49
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