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Compound Interest Worksheet and Answer Key

Compound Interest Calc Compound Interest Lesson

Students will practice solving for Amount, Principal and interest rate in the compound interest formula .

Note: this is the easier worksheet and does not require the use of logarithms . Try our harder compound interest worksheet for that .

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Example Questions

worksheet question 1

Other Details

This is a part worksheet:

  • Part I Model Problems
  • Part II Practice
  • Part II Answer Key
  • Compound Interest Formula
  • Compound Interest Calculator (Solves for any variable, types as you go)
  • Continuously Compounded Interest
  • Continuously Compounded Interest Calculator
  • Exponential Growth

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Types of Interest

Simple interest formula, compound interest formula, compounding periods.

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Additional interest considerations, the bottom line.

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Simple vs. Compound Interest: Definition and Formulas

comparing simple and compound interest homework 2 answer key

Interest is defined as the cost of borrowing money, as in the case of interest charged on a loan balance. Conversely, interest can also be the rate paid for money on deposit, as in the case of a certificate of deposit. Interest can be calculated in two ways:  simple interest or compound interest .

  • Simple interest is calculated on the principal , or original, amount of a loan.
  • Compound interest is calculated on the principal amount and the accumulated interest of previous periods, and thus can be regarded as “interest on interest.”

There can be a big difference in the amount of interest payable on a loan if interest is calculated on a compound basis rather than on a simple basis. On the positive side, the magic of compounding can work to your advantage when it comes to your investments and can be a potent factor in wealth creation.

While simple interest and compound interest are basic financial concepts, becoming thoroughly familiar with them may help you make more informed decisions when taking out a loan or investing. Cumulative interest can also help you choose one bond investment over another.

Key Takeaways

  • Interest can refer to the cost of borrowing money (in the form of interest charged on a loan) or to the rate paid for money on deposit.
  • In the case of a loan, simple interest is only charged on the original principal amount.
  • Simple interest is calculated by multiplying the loan principal by the interest rate and then by the term of a loan.
  • Compound interest multiplies savings or debt at an accelerated rate.
  • Compound interest is interest calculated on both the initial principal and all of the previously accumulated interest.

The formula for calculating simple interest is:

Simple Interest = P × i × n where: P = Principal i = Interest rate n = Term of the loan \begin{aligned}&\text{Simple Interest} = P \times i \times n \\&\textbf{where:}\\&P = \text{Principal} \\&i = \text{Interest rate} \\&n = \text{Term of the loan} \\\end{aligned} ​ Simple Interest = P × i × n where: P = Principal i = Interest rate n = Term of the loan ​

Thus, if simple interest is charged at 5% on a $10,000 loan that is taken out for three years, then the total amount of interest payable by the borrower is calculated as $10,000 x 0.05 x 3 = $1,500.

Interest on this loan is payable at $500 annually, or $1,500 over the three-year loan term.

The formula for calculating compound interest in a year is:

A = P ( 1 + r n ) n t where: A = Final amount P = Initial principal balance r = Interest rate n = Number of times interest applied per time period t = Number of time periods elapsed \begin{aligned}&A=P\left(1+\frac{r}{n}\right)^{nt}\\&\textbf{where:}\\&A=\text{Final amount}\\&P=\text{Initial principal balance}\\&r=\text{Interest rate}\\&n=\text{Number of times interest applied}\\&\qquad\text{per time period}\\&t=\text{Number of time periods elapsed}\end{aligned} ​ A = P ( 1 + n r ​ ) n t where: A = Final amount P = Initial principal balance r = Interest rate n = Number of times interest applied per time period t = Number of time periods elapsed ​

Compound Interest = total amount of principal and interest in future (or future value ) less the principal amount at present, called  present value (PV). PV is the current worth of a future sum of money or stream of  cash flows  given a specified  rate of return . 

Continuing with the simple interest example, what would be the amount of interest if it is charged on a compound basis? In this case, it would be:

Interest = $ 10 , 000 ( ( 1 + 0.05 ) 3 − 1 ) = $ 10 , 000 ( 1.157625 − 1 ) = $ 1 , 576.25 \begin{aligned} \text{Interest} &= \$10,000 \big( (1 + 0.05) ^ 3 - 1 \big ) \\ &= \$10,000 \big ( 1.157625 - 1 \big ) \\ &= \$1,576.25 \\ \end{aligned} Interest ​ = $10 , 000 ( ( 1 + 0.05 ) 3 − 1 ) = $10 , 000 ( 1.157625 − 1 ) = $1 , 576.25 ​

While the total interest payable over the three-year period of this loan is $1,576.25, unlike simple interest, the interest amount is not the same for all three years because compound interest also takes into consideration the accumulated interest of previous periods. Interest payable at the end of each year is shown in the table below.

When calculating compound interest, the number of compounding periods makes a significant difference. Generally, the higher the number of compounding periods, the greater the amount of compound interest. So for every $100 of a loan over a certain period, the amount of interest accrued at 10% annually will be lower than the interest accrued at 5% semiannually, which will, in turn, be lower than the interest accrued at 2.5% quarterly.

In the formula for calculating compound interest, the variables “i” and “n” have to be adjusted if the number of compounding periods is more than once a year.

That is, within the parentheses, “i” or interest rate has to be divided by “n,” the number of compounding periods per year. Outside of the parentheses, “n” has to be multiplied by “t,” the total length of the investment.

Therefore, for a 10-year loan at 10%, where interest is compounded semiannually (number of compounding periods = 2), i = 5% (i.e., 10% ÷ 2) and n = 20 (i.e., 10 x 2).

To calculate the total value with compound interest, you would use this equation:

Total Value with Compound Interest = ( P ( 1 + i n ) n t ) − P Compound Interest = P ( ( 1 + i n ) n t − 1 ) where: P = Principal i = Interest rate in percentage terms n = Number of compounding periods per year t = Total number of years for the investment or loan \begin{aligned} &\text{Total Value with Compound Interest} = \Big( P \big ( \frac {1 + i}{n} \big ) ^ {nt} \Big ) - P \\ &\text{Compound Interest} = P \Big ( \big ( \frac {1 + i}{n} \big ) ^ {nt} - 1 \Big ) \\ &\textbf{where:} \\ &P = \text{Principal} \\ &i = \text{Interest rate in percentage terms} \\ &n = \text{Number of compounding periods per year} \\ &t = \text{Total number of years for the investment or loan} \\ \end{aligned} ​ Total Value with Compound Interest = ( P ( n 1 + i ​ ) n t ) − P Compound Interest = P ( ( n 1 + i ​ ) n t − 1 ) where: P = Principal i = Interest rate in percentage terms n = Number of compounding periods per year t = Total number of years for the investment or loan ​

The following table demonstrates the difference that the number of compounding periods can make over time for a $10,000 loan taken for a 10-year period. 

Other Compound Interest Concepts

Time value of money.

Since money is not “free” but has a cost in terms of interest payable, it follows that a dollar today is worth more than a dollar in the future. This concept is known as the time value of money and forms the basis for relatively advanced techniques like discounted cash flow (DFC) analysis. The opposite of compounding is known as discounting . The discount factor can be thought of as the reciprocal of the interest rate and is the factor by which a future value must be multiplied to get the present value.

The formulas for obtaining the future value (FV) and present value (PV) are as follows:

FV = P V × [ 1 + i n ] ( n × t ) PV = F V ÷ [ 1 + i n ] ( n × t ) where: i = Interest rate in percentage terms n = Number of compounding periods per year t = Total number of years for the investment or loan \begin{aligned}&\text{FV}=PV\times\left[\frac{1+i}{n}\right]^{(n\times t)}\\&\text{PV}=FV\div\left[\frac{1+i}{n}\right]^{(n\times t)}\\&\textbf{where:}\\&i=\text{Interest rate in percentage terms}\\&n=\text{Number of compounding periods per year}\\&t=\text{Total number of years for the investment or loan}\end{aligned} ​ FV = P V × [ n 1 + i ​ ] ( n × t ) PV = F V ÷ [ n 1 + i ​ ] ( n × t ) where: i = Interest rate in percentage terms n = Number of compounding periods per year t = Total number of years for the investment or loan ​

The Rule of 72

The Rule of 72 calculates the approximate time over which an investment will double at a given rate of return or interest “i” and is given by (72 ÷ i). It can only be used for annual compounding but can be very helpful in planning how much money you might expect to have in retirement.

For example, an investment that has a 6% annual rate of return will double in 12 years (72 ÷ 6%).

An investment with an 8% annual rate of return will double in nine years (72 ÷ 8%).

Compound Annual Growth Rate (CAGR)

The compound annual growth rate (CAGR) is used for most financial applications that require the calculation of a single growth rate over a period.

For example, if your investment portfolio has grown from $10,000 to $16,000 over five years, then what is the CAGR? Essentially, this means that PV = $10,000, FV = $16,000, and nt = 5, so the variable “i” has to be calculated. Using a financial calculator or Excel spreadsheet , it can be shown that i = 9.86%.

Please note that according to cash flow convention, your initial investment (PV) of $10,000 is shown with a negative sign since it represents an outflow of funds. PV and FV must necessarily have opposite signs to solve “i” in the above equation.

CAGR is extensively used to calculate returns over periods for stocks, mutual funds, and investment portfolios. CAGR is also used to ascertain whether a mutual fund manager or portfolio manager has exceeded the market’s rate of return over a period. For example, if a market index has provided total returns of 10% over five years, but a fund manager has only generated annual returns of 9% over the same period, then the manager has underperformed the market.

CAGR can also be used to calculate the expected growth rate of investment portfolios over long periods, which is useful for such purposes as saving for retirement. Consider the following examples:

  • A risk-averse investor is happy with a modest 3% annual rate of return on their portfolio. Their present $100,000 portfolio would, therefore, grow to $180,611 after 20 years. In contrast, a risk-tolerant investor who expects an annual rate of return of 6% on their portfolio would see $100,000 grow to $320,714 after 20 years.
  • CAGR can be used to estimate how much needs to be stowed away to save for a specific objective. A couple who would like to save $50,000 over 10 years toward a down payment on a condo would need to save $4,165 per year if they assume an annual return (CAGR) of 4% on their savings. If they’re prepared to take on additional risk and expect a CAGR of 5%, then they would need to save $3,975 annually.
  • CAGR can also be used to demonstrate the virtues of investing earlier rather than later in life. If the objective is to save $1 million by retirement at age 65, based on a CAGR of 6%, a 25-year-old would need to save $6,462 per year to attain this goal. A 40-year-old, on the other hand, would need to save $18,227, or almost three times that amount, to attain the same goal.

Make sure you know the exact annual percentage rate (APR) on your loan since the method of calculation and number of compounding periods can have an impact on your monthly payments. While banks and financial institutions have standardized methods to calculate interest payable on mortgages and other loans, the calculations may differ slightly from one country to the next.

Compounding can work in your favor when it comes to your investments, but it can also work for you when making loan repayments. For example, making half your mortgage payment twice a month, rather than making the full payment once a month, will end up cutting down your amortization period and saving you a substantial amount of interest.

Compounding can work against you if you carry loans with very high rates of interest, like credit card or department store debt. For example, a credit card balance of $25,000 carried at an interest rate of 20%—compounded monthly—would result in a total interest charge of $5,485 over one year or $457 per month. 

Which Is Better, Simple or Compound Interest?

It depends on whether you're investing or borrowing. Compound interest causes the principal to grow exponentially because interest is calculated on the accumulated interest over time as well as on your original principal. It will make your money grow faster in the case of invested assets. However, on a loan, compound interest can create a snowball effect and exponentially increase your debt. If you have a loan, you'll pay less over time with simple interest.

What Are Some Financial Products That Use Simple Interest?

Most coupon-paying bonds, personal loans, and home mortgages use simple interest. On the other hand, most bank deposit accounts, credit cards, and some lines of credit tend to use compound interest.

How Often Does Interest Compound?

Interest can be daily, monthly, quarterly, or annually. The higher the number of compounding periods, the larger the effect of compounding.

Is Compound Interest Considered Income?

Yes: on some types of investments, like savings accounts or bonds, compound interest is considered income.

Get the magic of compounding working for you by investing regularly and increasing the frequency of your loan repayments. Familiarizing yourself with the basic concepts of simple interest and compound interest will help you make better financial decisions, saving you thousands of dollars and boosting your net worth over time.

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comparing simple and compound interest homework 2 answer key

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Comparing simple and compound interest

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1 example and 2 problems comparing simple and compound interest

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Comparing simple and compound interest

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Mathematics LibreTexts

2.4: Compound Interest

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  • Page ID 74293

  • Leah Griffith, Veronica Holbrook, Johnny Johnson & Nancy Garcia
  • Rio Hondo College

2.4 Learning Objectives

Use the compound interest formula to compute beginning or ending balance in an account

With simple interest, we were assuming that we pocketed the interest when we received it. In a standard bank account, any interest we earn is automatically added to our balance, and we earn interest on that interest in future years. This reinvestment of interest is called compounding .

Suppose that we deposit $1000 in a bank account offering 3% interest, compounded monthly. How will our money grow?

The 3% interest is an annual percentage rate (APR) – the total interest to be paid during the year. Since interest is being paid monthly, each month, we will earn \(\dfrac{3 \%}{12}=0.25 \%\) per month.

In the first month,

\(P_{0}=\$ 1000\)

\(r=0.0025(0.25 \%)\)

\(I=\$ 1000(0.0025)=\$ 2.50\)

\(A=\$ 1000+\$ 2.50=\$ 1002.50\)

In the first month, we will earn $2.50 in interest, raising our account balance to $1002.50.

In the second month,

\(P_{0}=\$ 1002.50\)

\(I=\$ 1002.50(0.0025)=\$ 2.51\) (rounded)

Notice that in the second month we earned more interest than we did in the first month. This is because we earned interest not only on the original $1000 we deposited, but we also earned interest on the $2.50 of interest we earned the first month. This is the key advantage that compounding of interest gives us.

Calculating out a few more months:

\(\begin{array}{|l|l|l|l|} \hline \textbf { Month } & \textbf { Starting balance } & \textbf { Interest earned } & \textbf { Ending Balance } \\ \hline 1 & 1000.00 & 2.50 & 1002.50 \\ \hline 2 & 1002.50 & 2.51 & 1005.01 \\ \hline 3 & 1005.01 & 2.51 & 1007.52 \\ \hline 4 & 1007.52 & 2.52 & 1010.04 \\ \hline 5 & 1010.04 & 2.53 & 1012.57 \\ \hline 6 & 1012.57 & 2.53 & 1015.10 \\ \hline 7 & 1015.10 & 2.54 & 1017.64 \\ \hline 8 & 1017.64 & 2.54 & 1020.18 \\ \hline 9 & 1020.18 & 2.55 & 1022.73 \\ \hline 10 & 1022.73 & 2.56 & 1025.29 \\ \hline 11 & 1025.29 & 2.56 & 1027.85 \\ \hline 12 & 1027.85 & 2.57 & 1030.42 \\ \hline \end{array}\)

To find an equation to represent this, if \(P_{m}\) represents the amount of money after \(m\) months, then we could write the recursive equation:

\(P_{m}=(1+0.0025) P_{m-1}\)

You probably recognize this as the recursive form of exponential growth. If not, we could go through the steps to build an explicit equation for the growth:

\(P_{1}=1.0025 P_{0}=1.0025(1000)\)

\(P_{2}=1.0025 P_{1}=1.0025(1.0025(1000))=1.0025^{2}(1000)\)

\(P_{3}=1.0025 P_{2}=1.0025\left(1.0025^{2}(1000)\right)=1.0025^{3}(1000)\)

\(P_{4}=1.0025 P_{3}=1.0025\left(1.0025^{3}(1000)\right)=1.0025^{4}(1000)\)

Observing a pattern, we could conclude

\(P_{m}=(1.0025)^{m}(\$ 1000)\)

Notice that the $1000 in the equation was \(P_0\), the starting amount. We found 1.0025 by adding one to the growth rate divided by 12, since we were compounding 12 times per year.

Generalizing our result, we could write

\(A=P_{0}\left(1+\dfrac{r}{n}\right)^{m}\)

In this formula:

\(m\) is the number of compounding periods (months in our example)

\(r\) is the annual interest rate

\(n\) is the number of compounds per year.

While this formula works fine, it is more common to use a formula that involves the number of years, rather than the number of compounding periods. If \(t\) is the number of years, then \(m = t n\). Making this change gives us the standard formula for compound interest.

Compound Interest

\(A=P_{0}\left(1+\dfrac{r}{n}\right)^{t n}\)

\(A\) is the balance in the account after N years.

\(P_0\) is the starting balance of the account (also called initial deposit, or principal)

\(r\) is the annual interest rate in decimal form

\(n\) is the number of compounding periods in one year.

If the compounding is done annually (once a year), \(n = 1\).

If the compounding is done quarterly, \(n = 4\).

If the compounding is done monthly, \(n = 12\).

If the compounding is done daily, \(n = 365\).

The most important thing to remember about using this formula is that it assumes that we put money in the account once and let it sit there earning interest.

A certificate of deposit (CD) is a savings instrument that many banks offer. It usually gives a higher interest rate, but you cannot access your investment for a specified length of time. Suppose you deposit $3000 in a CD paying 6% interest, compounded monthly. How much will you have in the account after 20 years?

In this example,

\(\begin{array} {ll} P_{0}=\$ 3000 & \text{the initial deposit} \\ r = 0.06 & 6\% \text{ annual rate} \\ n = 12 & \text{12 months in 1 year} \\ t = 20 & \text{since we’re looking for how much we’ll have after 20 years} \end{array}\)

So \(A=3000\left(1+\dfrac{0.06}{12}\right)^{20 \times 12}=\$ 9930.61\) (round your answer to the nearest penny)

Let us compare the amount of money earned from compounding against the amount you would earn from simple interest

As you can see, over a long period of time, compounding makes a large difference in the account balance. You may recognize this as the difference between linear growth and exponential growth.

Evaluating exponents on the calculator

When we need to calculate something like \(5^3\) it is easy enough to just multiply \(5 \cdot 5 \cdot 5=125\). But when we need to calculate something like \(1.005^{240}\), it would be very tedious to calculate this by multiplying 1.005 by itself 240 times! So to make things easier, we can harness the power of our scientific calculators.

Most scientific calculators have a button for exponents. It is typically either labeled like:

\([\wedge ]\), \([y^x]\), or \([x^y]\)

To evaluate \(1.005^{240}\) we'd type 1.005 \([\wedge]\) 240, or 1.005 \([y^x]\) 240. Try it out - you should get something around 3.3102044758.

You know that you will need $40,000 for your child’s education in 18 years. If your account earns 4% compounded quarterly, how much would you need to deposit now to reach your goal?

We’re looking for \(P_0\).

\(\begin{array} {ll} r = 0.04 & 4\% \\ n = 4 & \text{4 quarters in 1 year} \\ t = 18 & \text{Since we know the balance in 18 years} \\ A = \$40,000 & \text{The amount we have in 18 years} \end{array}\)

In this case, we’re going to have to set up the equation, and solve for \(P_0\).

\(40000=P_{0}\left(1+\dfrac{0.04}{4}\right)^{18 \times 4}\)

\(40000=P_{0}(2.0471)\)

\(P_{0}=\dfrac{40000}{2.0471}=\$ 19539.84\)

So you would need to deposit $19,539.84 now to have $40,000 in 18 years.

It is important to be very careful about rounding when calculating things with exponents. In general, you want to keep as many decimals during calculations as you can. Be sure to keep at least 3 significant digits (numbers after any leading zeros). Rounding 0.00012345 to 0.000123 will usually give you a “close enough” answer, but keeping more digits is always better.

To see why not over-rounding is so important, suppose you were investing $1000 at 5% interest compounded monthly for 30 years.

\(\begin{array} {ll} P_0 = \$1000 & \text{the initial deposit} \\ r = 0.05 & 5\% \\ n = 12 & \text{12 months in 1 year} \\ t = 30 & \text{since we’re looking for the amount after 30 years} \end{array}\)

If we first compute \(\dfrac{r}{n}\), we find \(\dfrac{0.05}{12} = 0.00416666666667\)

Here is the effect of rounding this to different values:

\(\begin{array}{|l|l|l|} \hline r / n \text { rounded to: } & \text { Gives } \boldsymbol{P}_{30} \text { to be: } & \text { Error } \\ \hline 0.004 & \$ 4208.59 & \$ 259.15 \\ \hline 0.0042 & \$ 4521.45 & \$ 53.71 \\ \hline 0.00417 & \$ 4473.09 & \$ 5.35 \\ \hline 0.004167 & \$ 4468.28 & \$ 0.54 \\ \hline 0.0041667 & \$ 4467.80 & \$ 0.06 \\ \hline \text { no rounding } & \$ 4467.74 & \\ \hline \end{array}\)

If you’re working in a bank, of course you wouldn’t round at all. For our purposes, the answer we got by rounding to 0.00417, three significant digits, is close enough - $5 off of $4500 isn’t too bad. Certainly keeping that fourth decimal place wouldn’t have hurt.

Using your calculator

In many cases, you can avoid rounding completely by how you enter things in your calculator. For example, in the example above, we needed to calculate

\(A=1000\left(1+\dfrac{0.05}{12}\right)^{12 \times 30}\)

We can quickly calculate \(12 \times 30=360\), giving \(A=1000\left(1+\dfrac{0.05}{12}\right)^{360}\).

Now we can use the calculator.

\(\begin{array}{|c|c|} \hline \textbf { Type this } & \textbf { Calculator shows } \\ \hline 0.05 [\div] 12 [=] & 0.00416666666667 \\ \hline [+] 11 [=] & 1.00416666666667 \\ \hline [\mathrm{y}^{\mathrm{x}}] 360 [=] & 4.46774431400613 \\ \hline [\times] 1000 [=] & 4467.74431400613 \\ \hline \hline \end{array}\)

Using your calculator continued

The previous steps were assuming you have a “one operation at a time” calculator; a more advanced calculator will often allow you to type in the entire expression to be evaluated. If you have a calculator like this, you will probably just need to enter:

1000 \([\times]\) ( 1 \([+]\) 0.05 \([\div]\) 12 ) \([y^x]\) 360 \([=]\).

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Go Math Answer Key

Texas Go Math Grade 7 Lesson 13.2 Answer Key Calculating and Comparing Simple and Compound Interest

Refer to our Texas Go Math Grade 7 Answer Key Pdf to score good marks in the exams. Test yourself by practicing the problems from Texas Go Math Grade 7 Lesson 13.2 Answer Key Calculating and Comparing Simple and Compound Interest.

Texas Go Math Grade 7 Lesson 13.2 Answer Key Calculating Sales and Income Tax

Texas Go Math Grade 7 Lesson 13.2 Answer Key 1

Question 1. Make a Prediction Predict how much simple interest Roberto will have earned after the tenth year. Suppose he continues to make no withdrawals. ______ Answer: Amount of interest earned = New balance × interest rate Write the interest rate as decimal. ie 5% = 0.05. Every year we calculate simple interest on a new balance to find the amount of a interest earned. Year 6 Amount of interest earned = $6000 × 0.05 = $30 Year 7 Amount of interest earned = $700 × 0.05 = $35 Year 8 Amount of interest earned = $800 × 0.05 = $40 Year 9 Amount of interest earned = $900 × 0.05 = $45 Year 10 Ainouiit of interest earned = $1,000 × 0.05 = $50 Roberto earns a total of $275 in interest after the tenth year.

Simple and Compound Interest Practice Worksheet Answer Key Question 2. Each year Amy deposits $100 into an account that earns simple interest at an annual rate of 8%. How much interest will she earn over the first five years? How much will be in her account after that time? Answer:

Texas Go Math Grade 7 Lesson 13.2 Answer Key 6

Question 3. Does the balance of Claudia’s account change by the same amount each year? Explain why or why not. Answer: No, it does not, because it is the case of compound interest. Compound interest is computed on the amount that includes the principal and any previously interest earned. The beginning balance for new phase is actually the ending balance from the previous phase, which contains the interest earned in that previous phase. Every year the interest is computed on that previous ending balance, which is different every year, and because of that the ending balance does not change by the same amount each year.

Question 4. Would the total amount in the account after 5 years be greater if the interest rate were higher? Explain. Answer: Yes, it would. If the interest rate were higher, the amount of interest earned in the first year would be greater and the ending balance would be greater too. It is compound interest and every next year the ending balance will be greater, and because of that, the total amount in the account after 5 years will be greater.

Texas Go Math Grade 7 Lesson 13.2 Answer Key 7

Year 1 New balance in the first year is $100. Amount of interest, earned = $100 × 0.06 = $6 Ending balance = $100 + $6 = $106

Year 2 New balance in the second year is the Ending balance from previous year plus Amount deposited, ie $106 + $100 = $206. Amount of interest earned = $206 × 0.06 = $12.36 Ending balance = $206 + $12.36 = $218.36

Year 3 New balance in the third year is the Ending balance from previous year plus Amount deposited, ie $218.36 + $100 = 8318.36. Amount of interest earned = $318.36 × 0.06 = $19.10 Ending balance = $318.36 + $19.10 = $337.46

Year 4 New balance in the forth year is the Ending balance from previous year plus Amount deposited. ie $337.46 + $100 = $437.46. Amount of interest earned = $437.16 × 0.06 = $26.25 Ending balance = $437.46 + $26.25 = $463.72

Year 5 New balance in the fifth year is the Ending balance from previous year plus Amount deposited. ie $463.72 + $100 = $563.72. Amount of interest earned $563.72 × 0.06 = $33.82 Ënding balance = $563.72 + $33.82 = $597.54 The total amount on the Claudia’s account at the end of the fifth year is $597.54.

Compare the amount on Claudia’s account with interest rate of 6% and amount on account with interest rate of 5%(from Example 2) using subtraction: $597.54 – $580.19 = $17.35 When the interest rate is higher, the amount on account is greater.

Example 3. Jane has two savings accounts, Account S and Account C. Both accounts are opened with an initial deposit of $100 and an annual interest rate of 5%. No additional deposits are made, and no withdrawals are made. Account S earns simple interest, and Account C earns interest compounded annually. Which account will earn more interest after 10 years? How much more? Answer: Step 1 Find the total interest earned by Account S after 10 years. Find the amount of interest earned in one year. principal × Interest rate = Interest for 1 year $100 × 0.05 = $5 Find the amount of interest earned in ten years. Interest for 1 year × Number of years = Interest for 10 years $5 × 10 = $50 Account S will earn $50 after 10 years. Step 2 Find the final amount in Account C. Then subtract the principal to find the amount of interest earned. A = P(1 + r) t = 100 × (1 + 0.05) 10 = 162.89 Account C will earn $162.89 – $100.00 = $62.89 after 10 years. Step 3 Compare the amounts using subtraction: $62.89 – $50 = $12.89 Account C earns $12.89 more in compound interest after 10 years than Account S earns in simple interest.

Question 6. What If? Suppose the accounts in Example 3 both have interest rates of 4.5%. Which account will earn more interest after 10 years? How much more? Answer: The account S earns simple interest, and account C earns interest compounded annually. The principal for both accounts is $100.

Account S Write interest rate as decimal. ie 1.5% = 0.045 Find the amount of interest earned in one year. Principal × Interest rate = Interest in one year $100 × 0.045 = $4.5 Now, find the amount of interest earned in ten tears. Interest for 1 year × Number of years = Interest for 10 years $4.5 × 10 = $45 Account S will earn $45 after 10 years.

Account C Use the formula for compound interest compounded annually. A= P(1 +r) t where P is the principal, r is interest rate(in decimal), t is the time in years and A is the amount in the account after t years if no withdrawals are made. Find the final amount in the account after 10 years. Substitute 10 for t, 100 for P and 0.045 for r in the formula. A = 100(1 + 0.045) 10 A = 100(1.045) 10 A = 100 . 1.55 A = 155 The final amount in account C is $155.

To find the amount of interest earned subtract principal from the final amount. $155 – $100 = $55 Account C will earn $55 after 10 years.

Compare the amounts using subtraction: $55 – $45 = $10 Account C will earn $10 more in compound interest after 10 years than account S earns in simple interest.

Texas Go Math Grade 7 Lesson 13.2 Guided Practice Answer Key  

Texas Go Math Grade 7 Lesson 13.2 Answer Key 8

year 1 Amount of interest earned = $150 × 0.03 = $4.5 Year 2 Amount of interest earned = $300 × 0.03 = $9 Year 3 Amount of interest earned = $450 × 0.03 = $13.5 Year 4 Amount of interest earned = $600 × 0.03 = $18 Year 5 Amount of interest earned = $750 × 0.03 = $22.5

Hasan earns $4.5 in interest after the first year. Hasan earns $4.5 + $9 = $13.5 in interest after the second year. Hasan earns $67.5 in interest after the fifth year.

Keri deposits $100 in an account every year on the same day. She makes no other deposits or withdrawals. The account earns an annual rate of 4% compounded annually. Complete the table. (Example 2)

Texas Go Math Grade 7 Lesson 13.2 Answer Key 3

Year 1 New balance in the first year is $100. Amount of interest earned = $100 × 0.04 = $4 Ending balance = $100 + $4 = $104

Texas Go Math Grade 7 Lesson 13.2 Answer Key 10

Year 2 New balance in the second year is the Ending balance front previous year plus Amount deposited. ie $104 + $100 = $201. Amount of interest carried = $204 × 0.04 = $8.16 Ending balance = $204 + $8.16 = $212.16

Texas Go Math Grade 7 Lesson 13.2 Answer Key 11

Year 5 New balance in the fifth year is the Ending balance from previous year plus Amount deposited. ie $441.64 + $100 = $541.64. Amount of interest earned = $541.61 × 0.04 = $21.66 Ending balance $541.64 + $21.66 = $563.3

Question 7. Theo deposits $2,000 deposit in a savings account earning compound interest at an annual rate of 5% compounded annually. He makes no additional deposits or withdrawals. Use the formula for compound interest to find the amount in the account after 10 years. (Example 3) Answer: Use the formula for compound interest compounded annually. A = P(1 + r) t where P is the principal, r is interest rate(in decimal), t is the time in years and A is the amount in the account after t years if no withdrawals are made. Find the final amount in the account after 10 years. Substitute 10 for t, 2,000 for P and 0.05 for r in the formula. A = 2,000(1 + 0.05) 10 A = 2,000(1.05) 10 A = 2,000 . 1.63 A= 3,260

The final amount in the account after 10 years is $3,260. To find the amount of interest earned subtract principal from the final amount. $3,260 – $2,000 = $1,260 Theo will earn $1,260 after 10 years.

Essential Question Check-In

Question 8. Describe the difference between simple interest and compound interest. Answer: The simple interest is computed only on the principal, and the compound interest is computed on the amount that includes the principal and any previously interest earned. Hence, amount of interest earned is greater when account earns a compounded annually, because the amount on which interest is calculated is greater.

The simple interest is computed only on the principal, and the compound interest is computed on the amount that includes the principal and any previously interest earned.

Texas Go Math Grade 7 Lesson 13.2 Independent Practice Answer Key   

Mia borrowed $5,000 from her grandparents to pay college expenses. She pays them $125 each month, and simple interest at an annual rate of 5% on the remaining balance of the loan at the end of each year.

Question 9. How many months will it take her to pay the loan off? Explain. Answer: She pays $125 each month, and the loan to her grandparents is $5,000. To find how many months will she take to pay the loan off, we have to divide the whole loan by the amount of monthly pay. \(\frac{\$ 5,000}{\$ 125}\) = 40 She will pay off the loan for 40 months.

Compound Interest 7th Grade Worksheet Answer Key Question 10. For how many years will she pay interest? Explain. Answer: Mia pays interest at the end of the year on the remaining balance of the loan. As long as there is some amount of remaining balance of the loan at the end of the year, she will pay interest. She pays monthly $125, which means that she pays yearly $125 × 12 = $1,500

The remaining balance of the loan at the cud of the first year we get when we subtract the amount of the loan that has been paid that year from the whole loan. First year she will pay $1,500 (plus the simple interest on the remaining balance of the loan, which we will not calculate in this Exercise).

The remaining balance at the end of the first year = $5,000 – $1,500 = $3,500 After the first year the loan is no longer $5,000 but $3,500.

To find the remiaining balance of the loan at the end of the second year we have to subtract the amount she pays yearly, ie $1,500 (the same amount every year), from the new amount of loan $3,500. The remaining balance at the end of the second year $3,500 – $1,500 = $2,000 After the second year the loan is $2,000.

To find the remaining balance of the loan at the end of the third year we have to subtract the amount she pays yearly, ie $1,500, from the new amount of loan, ie $2,000. The remaining balance at the end of the third year = $2,000 – $1,500 = $500

In the fourth year the remaining balance of the loan is 8500 which she will pay for the first four months of that year. By the end of the fourth year she will not have any remaining balance of the loan to calculate the simple interest. Hence, she will pay interest for three years.

Question 11. How much simple interest will she pay her grandparents altogether? Explain. Answer: Min pays simple interest on the remaining balance of the loan each year, so we have to calculate the simple interest at the end of each year. The simple interest = The remaining balance of the loan × Annual rate(in decimal) She pays monthly $125, which means that she pays yearly $125 × 12 = $1,500 Year 1 The remaining balance of the loan at the end of the first year we get when we subtract the amount of the loan that has been paid that year from the whole loan. The remaining balance at the end of the first year = $5,000 – $1,500 = $3,500 After the first year the remaining balance of the loan is $3,500. The simple interest = $3, 500 × 0.05 = $175 The simple interest at the end of the first year is $175.

Year 2 After the first year the loan is $3,500. To find the remaining balance of the loan at the end of the second year we have to subtract the amount she pays yearly, which is the same amount every year, ie $1,500, from the new amount of loan, ie $3,500. The remaining balance at the end of the second year = $3, 500 – $1,500 = $2,000 After the second year the remaining balance of the loan is $2,000. The simple interest $2, 000 × 0.05 = $100 The simple interest at the end of the second year is $100.

Year 3 After the second year the loan is $2,000. To find the remaining balance of the loan at the end of the third year we have to subtract the amount she pays yearly, ie $1,500, from the new amount of loan. ie $2,000. The remaining balance at the end of the third year = $2,000 – $1,500 = $500 After the third year the remaining balance of the loan is $500. The simple interest = $500 × 0.05 = $25 The simple interest at tile end of the second year is $25.

In the fourth year the remaining balance of the loan is $500 which she will pay for the first four months of that year. Hence, by the end of the fourth year, she will not have any remaining balance of the loan to calculate the simple interest.

Add all the simple interest we previously calculated to find the simple interest she will have to pay to her grandparents altogether. The simple interest = $175 + $100 + $25 = $300 Altogether she will pay the simple interest of $300.

Texas Go Math Grade 7 Lesson 13.2 Answer Key 14

Year 1 New balance in the first year is $500. Amount of interest earned = 8500 × 0.04 = $20 The interest earned at the end of the first year is $20. Ending balance = $500 + $20 = $250

Year 2 New balance in the second year is the Ending balance from previous year plus Amount deposited. ie $520 + $500 = $1,020. Amount of interest earned = $1.020 × 0.04 = $40.8 The interest earned at the cud of the second year is $40.8. Ending balance = $1,020 + $40.8 = $1,060.8

Year 3 New balance in the third year is the Ending balance from previous year plus Amount deposited, ie $1,060.8 + $500 = $1,560.8. Amount of interest earned = $1.560.8 × 0.04 = $62.43 The interest earned at the end of the third year is $62.43. Ending balance = $1,560.8 + $62.43 = $1,623

The interest earned at the end of the first year is $20. The interest earned at the end of the second year is $40.8. The interest earned at the end of the third year is $62.43.

Texas Go Math Grade 7 Lesson 13.2 Answer Key 4

Each month Jackson plans to deposit $25, and the year has 12 months. hence Amount deposited by year end = Monthly deposit × 12 Amount deposited by year end = $25 × 12 = $300 Amount of interest earned = New balance × Interest rate Ending balance = New balance + Amount of interest earned Write the interest rate as decimal, ie % = 0.04.

Year 1 New balance in the first year is $325. Amount of interest earned = $325 × 0.04 = $13 Ending balance = $325 + $13 = $338

Year 2 New balance in the second year is the Ending balance from previous year plus Amount deposited, ie $338 + $300 = $638. Amount of interest earned = $638 × 0.04 = $25.52 Ending balance = $638 + 825.52 = $663.52

Year 3 New balance in the third year is the Ending balance from previous year plus Amount deposited. ie $663.52 + $300 = $963.52. Amount of interest earned = $963.52 × 0.04 = $38.54 Ending balance = $963.52 + $38.54 = $1,002.06 After three years Jackson will have $1,002.06 on his account.

Texas Go Math Grade 7 Lesson 13.2 Answer Key 16

The Ending balance in the second year with a beginning balance of $25 is $663.52. The Ending balance in the first year with a beginning balance of $75 is $717.6. Compare these two Ending balances using subtraction: $717.6 – $663.52 = $54.08

The Ending balance in the third year with a beginning balance of $25 is $1,002.06. The Ending balance in the third year with a beginning balance of $75 is $1,058.3. Compare these two Ending balances using subtraction: $1,058.3 – $1,002.06 = $56.24

Notice that the differences between Ending balances each year, from Exercise 13 and Exercise 14, are not the same and not $75. Hence, the balance do not increase by $75 when the initial deposit increases by $75.

Simple Interest 7th Grade Math Worksheet Answer Key Question 15. Account A and Account B both have a principal of $1,000 and an annual interest rate of 4%. No additional deposits or withdrawals are made. Account A earns simple interest. Account B earns interest compounded annually. Compare the amounts in the two accounts after 20 years. Which earns more interest? How much more? Answer: Account A earns simple interest, and account B earns interest compounded annually. The principal for both accounts is $1,000.

Account A Write the interest rate as decimal. ie 4% = 0.04 Find the amount of interest earned in one year. Principal × Interest rate = Interest in one year $1,000 × 0.04 = $40 Now, find the amount of interest earned in 20 years. Interest for 1 year × Number of years = Interest for 20 years $40 × 20 = $800 Account A will earn $800 after 20 years.

Account B Use the formula for compound interest compounded ‘manually. A = P(1 + r) t where P is the principal, r is the interest rate(in decimal), t is the time in years and A is the amount in the account after t years if no withdrawals are made. Find the final amount in the account after 10 years. Substitute 20 for t, 1,000 for P, and 0.04 for r in the formula. A = 1,000(1 + 0.04) 20 44 = 1,000(1.04) 20 A = 1,000 ∙ 2.19 A = 2,190 The final amount iii account B is $2,190.

To find the amount of interest earned subtract the principal from the final amount. $2,190 – $1,000 = $1,190 Account C will earn $1,190 after 20 years.

Compare the amounts using subtraction: $1,190 – $800 = $390 Account B will earn $390 more in compound interest after 20 years than account A earns in simple interest.

Account B will earn $390 more in compound interest after 20 years than account A earns in simple interest.

Texas Go Math Grade 7 Lesson 13.2 H.O.T. Focus on Higher Order Thinking Answer Key   

Question 16. Justify Reasoning Luisa deposited $2,000 in an account earning simple interest at an annual rate of 5%. She made no additional deposits and no withdrawals. When she closed the account, she had earned a total of $2,000 in interest. How long was the account open? Answer: The principal for Luis’s account is $2. 000. Write interest rate as decimal. ie 5% 0.05 Find the amount of intere$ earned in one year. Principal × Interest rate = Interest in one year $2 000 × 0.05 = $100

We know that she earned a total of $2,000 in interest when she closed the account.

To find the number of years the account was open. we have to divide the total of interest earned by interest earned in one year. \(\frac{\$ 2,000}{\$ 100}\) = 200 20 years after the account was opened.

Question 17. Draw Conclusions Amanda deposits $500 into a savings account earning simple interest at an annual rate of 8%. Tori deposits $1,000 into a savings account earning simple interest at an annual rate of 2.5%. Neither girl makes any additional deposits or withdrawals. Which girl’s account will reach a balance of $1,500 first? Justify your answer. Answer: The principal for Anianda’s account is $500. Write interest rate as decimal, ie 8% = 0.08 Find the amount of interest in one year. Principal × Interest rate = Interest in one year $500 × 0.08 = $40 The amount of interest in one year is $40. We want to know when the total balance of Amanda’s account will be $1,500, ie how much interest the account needs to earn.

When we sum the principal and the total interest earned we get the total account balance.

Total balance = The principal + The total interest earned $1,500 = $500 + The total interest earned The total interest earned = $1,500 – $500 = $1,000 The total interest account needs to earn is $1,000. As the account earns $40 for one year. how many years does it take for the account to earn $1,000? To find the number of years needed divide the total interest by the interest in one year. \(\frac{\$ 1,000}{\$ 40}\) = 2o It needs 25 year to Amanda’s account reach a balance of $1,500.

The principal for Tori’s account is $1,000. Write interest rate as decimal. ie 2.5% = 0.025 Find the amount of interest earn in one year. Principal × Interest rate = Interest in one year $1.000 × 0.025 = $25 The amount of interest earn in one year is $25. We want to know when the total balance of Tori’s account will be $1,500, ie how much interest the account needs to earn.

Total balance = The principal + The total interest earned $1, 500 = $1,000 + The total interest earned The total interest earned = $1,500 – $1,000 = $500 The total interest account needs to earn is $500. As the account earns $25 for one year, how many years does it take for the account to earn $500? To find the number of years needed divide the total interest by the interest in one year. \(\frac{\$ 500}{\$ 25}\) = 20 It needs 20 year to Tori’s account reach a balance of $1,500. Hence, Tori account will first reach a balance of $1,500.

Texas Go Math Grade 7 Lesson 13.2 Answer Key 17

Year 1 New balance in the first year is $1,000. Amount of interest earned = $1, 000 × 0.05 = $50 Ending balance = $1,000 + $50 = $1,050

Year 2 New balance in the second year is the Ending balance from previous year plus Amount deposited, ie $1,050+ $1,000 = $2,050 Amount of interest earned = $2,050 × 0.05 = $102.5 Ending balance = $2,050 + $102.5 = $2,152.50

New balance in the third year is the Ending baIance from previous year plus Amount deposited, ie $2,152.50 + $1,000 = $3,152.5 Amount of interest earned = $3,152.5 × 0.5 = $157.63 Ending balance = $3,152.5 + $157.63 = $3,310.13

Texas Go Math Grade 7 Lesson 13.2 Answer Key 19

Year 1 New balance in the first year is $10,000. Amount of interest earned = $10,000 × 0.05 = $500 Ending balance = $10,000 + $500 = $10,500

Year 2 New balance in the second year is the Ending balance from previous year plus Amount deposited, ie $10,500 + $10,000 = $20,500 Amount of interest earned = $20, 500 × 0.05 = $1,025 Ending balance = $20,500 + $1,025 = $21, 525

New balance in the third year is the Ending balance from previous year plus Amount deposited, ie $21,525 + $10,000 = $31,525 Amount of interest earned = $31,525 × 0.5 = $1,576.25 Ending balance = $31, 525 + $1, 576.25 = $33,101.25

Year 4 New balance in the forth year is the Eìiding balance from previous year plus Amount deposited. ie $33,101.25 + $10,000 = $13, 101.25 Amount of interest earned = $43,101.25 × 0.5 = $2,155.06 Ending balance = $43,101.25 + $2,155.06 = $45,256.31 After 4 years Gary would earn interest of $5,256.31.

The money was 4 years in the account. If Gary deposit $10,000 instead $1,000 he would earn interest of $5,256.31.

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  1. Solved Exercise 2: Compare simple and compound interest

    Exercise 2: Compare simple and compound interest (compounded annually) on a principal of $15,000 at an annual rate of 3% for a 5-year period. If you haven't done so rename sheet 2 to EX 2 and your answer for the question should be under sheet EX 2 Exercise 3: Compare simple and compound interest (compounded annually) on a principal of $25,000 at an annual rate of 4%.

  2. Solved S Class... D2L Modu... Consumer Mathematics

    Consumer Mathematics Calculating and comparing simple interest and compound interest Lisa deposits $40,000 into an account that pays 6% interest per year, compounded annually. Scott deposits $40,000 into an account that also pays 6% per year. But it is simple interest. Year Find the interest Lisa and Scott earn during each of the first three years.

  3. Compound Interest Worksheet and Answer Key

    Free worksheet(pdf) and answer key on Compound interest. 20 scaffolded questions that start relatively easy and end with some real challenges. Plus model problems explained step by step. Math Gifs; ... Try our harder compound interest worksheet for that. Example Questions. Other Details. This is a part worksheet: Part I Model Problems; Part II ...

  4. 6.1: Simple and Compound Interest

    So A = 3000(1 + 0.0612)20×12 = $9930.61 (round your answer to the nearest penny) Let us compare the amount of money earned from compounding against the amount you would earn from simple interest. Years. Simple Interest ($15 per month) 6% compounded monthly = 0.5% each month. 5.

  5. PDF B.1 Simple and Compound Interest

    Section B.1 Simple and Compound Interest A11 Work with a partner. a. Graph the end-of-year balances for each type of interest in Activity 1. b. Which graph is linear? Explain your reasoning. c. For the linear graph, write a linear function that represents the balance after t years. 2 ACTIVITY: Comparing Simple and Compound Interest

  6. 8.2: Simple and Compound Interest

    Note: As shown above, wait to round your answer until the very last step so you get the most accurate answer. ... Example \(\PageIndex{6}\): Comparing Simple Interest versus Compound Interest. Let's compare a savings plan that pays 6% simple interest versus another plan that pays 6% annual interest compounded quarterly. If we deposit $8,000 ...

  7. 8.12D: Simple and Compound Interest Practice Flashcards

    The amound of the original investment. Interest. The fee paid to a depositor for keeping their money in a saving account. Interest Rate. Determines the fee paid to the depositor each year. Simple Interest. Interest is paid on the principle only. Compound Interest. Interest is paid on both principle and interest.

  8. PDF Comparing Simple and 11 Compound Interest

    Comparing Simple and Compound Interest GRAE 11 Simple and Compound Interest Worksheet Part B - Choosing an Account You have $10,000 to put into one of the three accounts below. Find out how much each account would be worth after 10 years. 1) Look at the accounts on the chart below and note their specificsrates. Begin by predicting which account

  9. Simple Interest vs. Compound Interest: The Main Differences

    Key Takeaways. Interest is the cost of borrowing money, where the borrower pays a fee to the lender for the loan. Generally, simple interest is an annual payment based on a percentage of the saved ...

  10. Simple vs. Compound Interest: Definition and Formulas

    Simple interest is calculated by multiplying the loan principal by the interest rate and then by the term of a loan. Compound interest multiplies savings or debt at an accelerated rate. Compound ...

  11. 7.2: Compound Interest

    7.2: Compound Interest. With simple interest, we were assuming that we pocketed the interest when we received it. In a standard bank account, any interest we earn is automatically added to our balance, and we earn interest on that interest in future years. This reinvestment of interest is called compounding.

  12. 4B: The Power of Compounding Flashcards

    Accumulated Value ( A) The total value of an account after t years. This includes the original principal plus any interest paid. Accumulated Value Formula ( A) A ccumulated Value = P rincipal + I nterest. A = P + I. Compound Interest Formula. Interest Rate per Compounding Period ( i ) Total number of compounding periods.

  13. Comparing Simple And Compound Interest Teaching Resources

    This is a quick introduction to simple and compound interest, with the differences between both being compared and worked examples of each type in interest.There are also sample questions on a separate worksheet.I have used this so that students have a kind of easy introduction to concepts that will be discussed in my "Exponential growth and decay - word problems" product, instead of just ...

  14. PDF solve real-world problems involving personal and family budgets and net

    Homework 1 DAY 6 Calculating Interest Student Handout 5 Homework 5 DAY 11 Personal Financial Literacy Unit Test Unit Test DAY 2 Minimum Household Budgets Student Handout 2 Homework 2 DAY 7 Comparing Simple and Compound Interest Student Handout 6 Homework 6 NOTES This unit does not have readiness standards, but it does cover a variety of topics.

  15. Comparing simple and compound interest

    School subject: Math (1061955) Main content: Simple and compound interest (1143670) 1 example and 2 problems. comparing simple and compound interest.

  16. 2.4: Compound Interest

    Use the compound interest formula to compute beginning or ending balance in an account. With simple interest, we were assuming that we pocketed the interest when we received it. ... (1+\dfrac{0.06}{12}\right)^{20 \times 12}=\$ 9930.61\) (round your answer to the nearest penny) Let us compare the amount of money earned from compounding against ...

  17. Solved Comparing Simple and Compound Interest Principal (P ...

    Advanced Math questions and answers Comparing Simple and Compound Interest Principal (P)= Rate (R%)= Use the slider to see what happens over time. Time =0 Simple

  18. Texas Go Math Grade 7 Lesson 13.2 Answer Key Calculating and Comparing

    Test yourself by practicing the problems from Texas Go Math Grade 7 Lesson 13.2 Answer Key Calculating and Comparing Simple and Compound Interest. Texas Go Math Grade 7 Lesson 13.2 Answer Key Calculating Sales and Income Tax. Example 1. Roberto's parents open a savings account for him on his birthday.

  19. Simple and Compound Interest Calculator

    Our calculator allows the accurate calculation of simple or compound interest accumulated over a period of time. Select the currency from the drop-down list (this step is optional). 1. The simple interest, or. 2. Compound interest. Enter the principal amount, interest rate, time period, and click 'Calculate' to retrieve the interest.

  20. Solved 7) Compare and contrast the simple and compound

    See Answer. Question: 7) Compare and contrast the simple and compound interest formulas. Which one of the following statements is correct? a. Simple interest and compound interest formulas both yield principal plus interest, so you must subtract the principal to get the amount of interest. b.

  21. Results for comparing compound and simple interest

    In this HANDS-ON Compare the Interest Tic-Tac-Toe activity, students will look read a word-problem on the Tic-Tac-Toe cards and then solve for what is being asked using simple interest and compound interest.Once they have solved the problem, students can flip the card over to check their answer and they will then place a tic-tac-toe marker to claim their space.