Compound Interest Answers

A principal of $4,570 is placed in an account that earns 4.5% interest. If the interest is compounded annually, how much money will be in the account at the end of 5 years?a.$4654.15b.$4775.65c.$5638.75d.$5695.05

How much more interest is earned on an investment of $12,585 at 3.5% interest over 5 years if the interest is compounded annually rather than earning simple interest?a.They are the same.b.$159.65c.$2,362.03d.$12,744.65

You have $12,000 to invest and want to keep your money invested for 8 years. You are considering the following investment options. Choose the investment option that will earn you the most money.a.3.99% compounded monthlyb.4% compounded quarterlyc.4.175% compounded annuallyd.4.2% simple interest

Approximately how much principal would need to be placed into an account earning 3.575% interest compounded quarterly so that it has an accumulated value of $68,000 at the end of 30 years?a.$23,706b.$23,377c.$52,069d.$58,944

Choose the proper rationale. “In the compound interest equation, time (the variable t) has the biggest effect on the outcome because...”a.Time is usually the largest number in the equation.b.Time uses the largest units (years are bigger than dollars or percentages).c.Time is an exponent while the other units are factors.d.Time is the independent variable.

Money is invested into an account earning 4.25% interest compounded annually. If the accumulated value after 18 years will be $25,000, approximately how much money is presently in the account?a.$5,875b.$11,820c.$19,125d.$23,960

An investment of $9,875 earns 4.8% interest compounded monthly over 12 years. Approximately how much interest is earned on the investment?a.$4,740b.$7,458c.$7,672d.$17,567

Shawnee is putting $3,500 into an account earning 4.85% interest compounded quarterly. She estimates that it will take just over 11 years for this investment to grow to $6,000. Which of the following is a true statement?a.Shawnee’s estimate of the time is too low.b.Shawnee’s estimate of the time is correct.c.Shawnee’s estimate of the time is too high.d.Shawnee does not have enough information to estimate the time.

The same amount of principal is invested in different accounts earning the same interest rate. Which of the following accounts would have the greatest accumulated value at the end of one year?a.An account earning no interestb.An account earning simple interestc.An account earning interest compounded annuallyd.An account earning interest compounded daily

An investment of $6,599.20 earns 4.2% interest compounded monthly over 7 years. Approximately how much interest is earned on the investment?a.$2,250.96b.$4,308.21c.$6,762.59d.$8,850.20