Simple and Compound Interest Assignment



Simple and Compound Interest Assignment

Answer all questions on lined paper.

1- Identify variables ex: i=0.04, P=$4000

1- Correct equation ex A=P(1+i)n

2- Solution

1- Therefore statement ex: “Therefore Tony pays $550 in interest.”

Simple Interest

1. Martha invested $600 in an account earning 7% simple interest for 10 years. How much interest did Martha earn?

2. William borrowed $6000 at 5% simple interest for 3 years. How much must interest will he owe at the end of the 3 years?

3. What interest rate is required for $6000 to grow to $7800 in 36 months?

Compound Interest

4. $4000 is invested at 6% compounded semi-annually for 8 years. How much will it be worth at the end of the term?

5. Paula borrowed $3000 at 9% compounded quarterly for 4 years.

a. How much will she have to repay?

b. How much of this is interest?

6. Paul borrowed $2600 at 9% compounded monthly for 3 years. How much will he have to repay?

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