Compound Interest Check Point
- 1. P=$5000
R=5% p.a.
t= 8 years
Find the total amount owing if interest is compounded annually?
A) $7000
B) $5250.00
C) $7387.28
D) $128144.53
- 2. A=$12000
R=3% p.a.
t=4 years
Find the principal amount invested, if interest was compounded annually?
A) $4201.53
B) $100000
C) $10000
D) $10661.84
- 3. P=$6000
A=$7100
t= 5 years
Find the interest rate, if interest was compounded annually?
A) 3.12% p.a.
B) 4.32% p.a.
C) 3.42% p.a.
D) 3.67% p.a.
- 4. P=$10000
A=$14546.79
R=5.5% p.a.
Find the time taken, if interest was compounded annually?
A) approx 7 years
B) approx 6 years
C) approx 8 years
D) approx 9 years
- 5. ** Julie paid $450 a month to the bank for 5.5 years to pay back her loan. If the interest was compounded yearly and the interest rate was 4%. How much did she borrow?
A) $31342.17
B) $23937.19
C) $29700.00
D) $20000.00
- 6. P=$5000
R=7.1% p.a.
t = 4 years
Calculate the amount at the end of the period if interest is compounded semi annually?
A) $6609.53
B) $6578.52
C) $8655.37
- 7. P=$8000
R=8% p.a.
t=8 years
Calculate the amount at the end of the period if interest is compounded monthly?
A) $12935121.54
B) $14807.44
C) $15139.66
- 8. Which is better (more interest made)?
a) $10000 invested at 5.5% flat rate interest for 8 years
or
b) $10000 invested at 4.9% p.a. compounding annually for 7 years
A) a
B) b
- 9. Compare the scenarios:
a) $10000 invested at 4.5% p.a. compounded annually over 8 years
b) $10000 invested at 4.5% p.a. compounded monthly over 8 years
- 10. Why do we have to change both the rate and the n (t value) in the compound interest formula - when we are compounding monthly instead of annually? AND how do we change these two values for compounding monthly?
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