3 Slides • 3 Questions

Vocabulary

Compound interest is the addition of interest to the principal sum of a loan or deposit, or in other words, interest on interest.

Annually means once a year (1 period).

Semi-annually means twice a year (2 periods).

Monthly means every month in a year (12 periods).

Quarterly means every three months or 4 times a year (4 periods).

Daily means every day in a year (365 periods).

3

4

Multiple Choice

What does the P stand for in this formula?

1

Initial amount

2

Final amount

3

Rate

4

Time

5

The number of times compounded per year

5

Multiple Choice

What does the r stand for in this formula?

1

Initial amount

2

Final amount

3

Rate

4

Time

5

The number of times compounded per year

6

Multiple Choice

What does the n stand for in this formula?

1

Initial amount

2

Final amount

3

Rate

4

Time

5

The number of times compounded per year

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Compound Interest

Vocabulary

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