Interest Re-Quiz

Jay'den earned $475 from mowing lawns last summer. He deposited this money in an account that pays an interest rate of 3.8% compounded annually. What will be his balance after 15 year?

Emilio borrows $1200 from a bank with 8% simple interest per year. How much will he have to pay back TOTAL in 2 years?

You deposit $2,500 in a savings account.

What is the difference in the amount of interest that will be paid in each situation?

Option A) Interest rate of 8.25% simple interest for 2 years

Option B) Interest rate of 6.5% compounded annually for 2 years

You invested $1,900 at a 4% interest compounded annually for 3 years in a savings account. How much interest did you earn in 3 years?

Sam borrowed $4,500 for 2 years and had to pay $630 simple interest at the end of that time. What rate of interest did he pay?

You take out a loan for $175,000. Which option will cost you less?

A) Simple Interest rate of 4.17% over 15 years

B) Compound Interest rate of 3.5% over 15 years