Compound Interest Concepts and Calculations
Interactive Video
•
Mathematics, English, Business
•
7th - 10th Grade
•
Practice Problem
•
Easy
Mia Campbell
Used 7+ times
FREE Resource
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10 questions
Show all answers
1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What does the variable 'P' represent in the compound interest formula?
Interest rate
Final amount
Number of times compounded per year
Initial amount
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
If an investment is compounded annually, what is the value of 'n'?
12
4
1
2
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
In the first example, what is the interest rate converted to a decimal?
0.5
0.05
0.005
5
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the common mistake people make when calculating compound interest?
Multiplying the principal by the interest rate first
Using the wrong formula
Adding the interest rate to the principal first
Ignoring the number of times compounded
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the final amount after 7 years for the first example?
$1,407.10
$1,500.00
$1,050.00
$1,700.00
6.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
In the second example, what is the interest rate converted to a decimal?
0.012
0.0012
1.2
0.12
7.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
For monthly compounding, what is the value of 'n'?
1
4
12
2
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