Practice Compound Interest (7.4) - Comparing Quantities

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8 questions

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Exercise
6 questions · about 4 min · pass mark 70%. Hints available.
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2 questions · about 1 min · pass mark 70%. Hints available.
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6 sample questions

Question 1.
What is the principal amount if a total of $1,100 is returned after one year at an interest rate of 10%?
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Reverse calculate using the interest formula.
Question 2.
If $500 is invested at a 5% compound interest rate for 1 year, what will be the return?
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Calculate using A = P(1 + r).
3Question 3.
What is the formula for calculating the total amount including compound interest?
- A = P(1 + r/n)^(nt)
- A = P + I
- A = P(1 + r)
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Remember the components related to principal, rate, and time.
4Question 4.
True or False: The principal amount changes each year when calculating compound interest.
- True
- False
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Think about how interest compounds.
Question 5.
Classify a scenario where an investment of $10,000 grows to $14,693 in 5 years. Calculate the annual compound interest rate.
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Isolate the interest rate in your calculations.
Question 6.
You have $5,000 invested at a compound interest rate of 7% per annum. Calculate how long it will take to double your investment.
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How do the rules of compounding help us estimate time needed?

4 more questions in this section. Enroll free to practise them all.