Compound Interest Answers

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

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

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.

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

An investment of $1,000 is earning interest at the rate of 3.8% compounded daily over 3 years. Approximately how much interest is earned on the investment? a. $892.26 b. $1120.75 c. $120.75 d. $38.73 Please select the best answer from the choices provided

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

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

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

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?