Simple and Compound Interest

A friend lends you $200 for a week, which you agree to repay with 5% one-time interest. How much will you have to repay?

You loan your friend $100. They agree to pay an annual interest rate of 3%, simple interest. Six months later they repay that loan.

1. How much did they pay you?

2. How much was interest?

Consider a simple interest loan of $200 with an annual interest rate of 6%. If that loan is paid off 1 year and 3 months later, how much was repaid?

You deposit $1,000 in an account that earns simple interest. The annual interest rate is 2.5%.

1. How much interest will you earn in 5 years?

2. How much will you have in the account in 5 years?

Consider an investment of $20000 with an annual interest rate of 5%.

1. If that investment is earning simple interest, how much will the investment be worth in 10 years?

2. If that investment is getting annually compounding interest, how much will the investment be worth in 10 years?

Nico invests $4,500 into an account that has an annual interest rate of 8.5%. The interest is compounding monthly. Twenty years later what is the account balance?

How much will $1,000 deposited in an account earning 7% APR compounded weekly be worth in 20 years?

Suppose you obtain a $3,000 Certificate of Deposit (CD) with a 3% APR, paid quarterly, with maturity in 5 years.

1. What is the future value of the CD in 5 years?

2. How much interest will you earn?

3. What percent of the balance is interest?

You deposit $300 in an account earning 5% APR compounded annually. How much will you have in the account in 10 years?

1. How much will you have in the account in 10 years?

2. How much interest will you earn?

3. What percent of the balance is interest?

You deposit $2,000 in an account earning 3% APR compounded monthly.

1. How much will you have in the account in 20 years?

2. How much interest will you earn?

3. What percent of the balance is interest?

4. What percent of the balance is the principal?

You deposit $10,000 in an account earning 4% APR compounded weekly.

1. How much will you have in the account in 25 years?

2. How much interest will you earn?

3. What percent of the balance is interest?

4. What percent of the balance is the principal?

How much would you need to deposit in an account now in order to have $6,000 in the account in 8 years? Assume the account earns 6% APR compounded monthly.

How much would you need to deposit in an account now in order to have $20,000 in the account in 4 years? Assume the account earns 5% APR compounded quarterly.

Breylan invests $1,200 in an account that earns 4.6% APR compounded quarterly and Angad invests the same amount in an account that earns 4.55% APR compounded weekly.

1. What will their balances be after 15 years?

2. What will their balances be after 30 years?

3. What is the effective rate for each account?

Bill invests $6,700 in a savings account that compounds interest monthly at 3.75% APR. Ted invests $6,500 in a savings account that compound interest annually at 3.8% APR.

1. Find the effective rate for each account.

2. Who will have the higher accumulated balance after 5 years?

Bassel is comparing two accounts where one pays 3.45% APR quarterly and the second pays 3.4% APR daily.

1. What is the effect rate for each?

2. If he has $5,000 to deposit how much will the balance be in 10 years?

You deposit $2,500 into an account earning 4% APR compounded continuously.

1. How much will you have in the account in 10 years?

2. How much total interest will you earn?

3. What percent of the balance is interest?

You deposit $1,000 into an account earning 5.75% APR compounded continuously.

1. How much will you have in the account in 15 years?

2. How much total interest will you earn?

3. What percent of the balance is interest?

You deposit $5,000 in an account earning 4.5% APR compounded continuously.

1. How much will you have in the account in 5 years?

2. How much total interest will you earn?

3. What percent of the balance is interest?

You deposit $10,000 in an account that earns 5.5% APR compounded continuously and your friend deposits $10,000 in an account that earns 5.5% APR compounded annually.

1. How much more will you have in the account in 10 years?

2. How much more interest did you earn in the 10 years?