Compound Interest Answers

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

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

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

Porsha calculates the amount of money she will have at the end of 6 years on a $5,000 investment earning 3.75% interest compounded quarterly. She writes the following expression: Which of the following statements about Porsha's expression is true? a. Porsha's expression is correct. b. Porsha's expression should have 1 + 0.009375 in the parentheses. c. Porsha's expression should have an exponent of 6, not 24. d. Porsha's expression should have both 1 + 0.009375 in the parentheses and an exponent of 6. Please select the best answer from the choices provided

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

How much money would need to be deposited into an account earning 5.75% interest compounded annually in order for the accumulated value at the end of 25 years to be $85,000?a.$75,425.52b.$59,130.43c.$21,009.20d.$20,258.70

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

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 $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

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

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

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

An investment of $7,650 earns interest at the rate of 5% and is compounded quarterly. What is the accumulated value of the investment at the end of 9 years?a.$11,964.17b.$11,867.66c.$9,338.56d.$8,554.94

How much money would need to be deposited into an account earning 5.75% interest compounded annually in order for the accumulated value at the end of 25 years to be $85,000?a.$75,425.52b.$59,130.43c.$21,009.20d.$20,258.70

An investment of $2,000 is earning interest at the rate of 6.2% compounded quarterly over 5 years. Approximately how much interest is earned on the investment? a. $724.67 b. $2127.72 c. $720.37 d. $2720.37 Please select the best answer from the choices provided

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.

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.

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

Certain investments compound interest at different intervals. What effect does the size of the compounding interval have on the yield of the investment?a.Investments with smaller compounding intervals have a higher yield, because the interest earned is reinvested more quickly and thus gains compound interest more quickly.b.Investments with smaller compounding intervals have a lower yield, because the interest earned is smaller at each interval.c.The size of the compounding interval does not affect the total yearly interest percentage rate and only exists for bookkeeping purposes.d.Investments with smaller compounding intervals have a lower yield, because the bank charges a small fee every time interest is compounded.

Lonnie is considering doing some long term investing with money that she inherited. She would like to have $50,000 at the end of 30 years. Approximately how much money would Lonnie need to put into an account earning 6% interest compounded annually in order to meet her goal? a.$8,706b.$9,000c.$27,778d.$40,690

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