Outcome C3: Determine the effects of compound interest on ...
Outcome C3: Determine the effects of compound interest on deposits made into savings accounts using technology.
Outcome C4: Explore the growth of savings based on a variety of investment strategies ranging in amounts and time frames using technology.
Step 1: Go to: Explore
Step 2: Go to: “Simple and Compound Interest” Gizmo
Step 3: Complete: Exploration Guide.
Step 4: Complete: 5 Assessment Questions from the site, (also below).
Assessment Questions:
Top of Form
1. You invest $1000 in a 5-year savings bond that pays 8% annual interest on the principal. How much total interest will you have earned after 5 years? (Round your answer to the nearest dollar).
o [pic]A. $80
o [pic]B. $400
o [pic]C. $469
o [pic]D. $1469
2. You deposit $1000 in a bank account. The money earns 10% compound interest annually. After 2 years, what will the balance in the account be? (Assume you do not withdraw any money from the account.)
o [pic]A. $200
o [pic]B. $210
o [pic]C. $1200
o [pic]D. $1210
3. You pay for a $100 purchase using a credit card. The credit card company charges 15% interest every month on the unpaid balance. How much will you owe after 3 months, assuming you don't make any payments during this time? (Round your answer to the nearest dollar).
***COMPOUND INTEREST***
o [pic]A. $100
o [pic]B. $145
o [pic]C. $152
o [pic]D. $450
4. Which of the following will result in the greatest total interest? (Unless specified otherwise, assume the interest is calculated as simple interest.)
o [pic]A. A loan of $5000 for 5 years at a 7% annual interest rate
o [pic]B. A loan of $5000 for 10 years at a 7% annual interest rate
o [pic]C. A loan of $5000 for 5 years at a 14% annual interest rate
o [pic]D. A loan of $5000 for 5 years at a 14% annual compound interest rate
5. Find the amount of interest earned on $5,000 at 15% compounded annually for 10 years. (Round your answer to the nearest dollar.)
o [pic]A. $5,802
o [pic]B. $7,500
o [pic]C. $15,228
o [pic]D. $20,228
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