Compound Interest Answers

Lakisha just won some money in a sweepstakes drawing. She is considering putting her winnings in a long term investment. To the nearest dollar, how much money would Lakisha need to put into an account earning 5% interest compounded annually in order to have $30,000 at the end of 20 years?

You have $10,000 to invest and want to keep your money invested for 10 years. You are considering the following investment options. Choose the investment option that will earn you the most money.a.2.89% compounded monthlyb.2.975% compounded quarterlyc.2.99% compounded annuallyd.3.25% simple interest

How much money would need to be deposited into an account earning 5.25% interest compounded annually in order for the accumulated value at the end of 25 years to be $75,000?a.$20,243.85b.$20,869.34c.$57,142.86d.$67,245.61

An investment of $6,530 earns interest at the rate of 4% and is compounded quarterly. What is the accumulated value of the investment at the end of 8 years?a.$7,071.05b.$7,659.97c.$8,936.76d.$8,978.36

Cameron has decided to diversify his investments in the following way:$3,000 in an account earning 2.7% simple interest$5,000 in a savings account earning 1.8% interest compounded annually$5,000 in a certificate of deposit earning 3.9% interest compounded quarterlyHow much total interest will Cameron earn on his investments at the end of 3 years?a.$530.87b.$665.57c.$973.30d.$1,135.30

A principal of $5,350 is placed in an account that earns 3.5% interest. If the interest is compounded annually, how much money will be in the account at the end of 4 years?a.$5,760.06b.$5,537.25c.$6,099.00d.$6,139.25

Mariah is putting $5,270 into an account earning 3.75% interest compounded quarterly. She estimates that it will take just over 9 years for this investment to grow to $8,000. Which of the following is a true statement?a.Mariah’s estimate of the time is too low.b.Mariah’s estimate of the time is correct.c.Mariah’s estimate of the time is too high.d.Mariah does not have enough information to estimate the time.

An investment of $8,350 earns 5.2% interest compounded monthly over 10 years. Approximately how much interest is earned on the investment?a.$4,342b.$5,513c.$5,679d.$13,863

Explain how compound interest is better than simple interest when it comes to saving money.