# Worksheet: Compound Interest

Q1:

A bank offers a savings account with an annual interest rate. For an initial investment , the capital after years is given by . What is the annual interest rate?

• A
• B
• C
• D
• E

Q2:

David invested in a fund with a guaranteed annual growth of .

Write an expression for the value of his fund after years.

• A
• B
• C
• D
• E

The fund’s growth is calculated monthly.

We can rewrite the expression for the fund’s value as .

Use the new form of the expression to find the monthly growth rate. Give your answer to 3 significant figures.

Q3:

Victoria has that she wants to invest. Her bank has several investment accounts to choose from, all compounding daily. Her goal is to have by the time she finishes graduate school in 6 years. Find, to the nearest hundredth of a percent, the minimum annual interest rate she would need? Solve the compound interest formula for the interest rate.

Q4:

Matthew decides to save every month for 4 years. He can save in an account that pays annual interest of or an account that pays annual interest of compounded monthly. Which account will give the better return on his investment?

• A the account that pays compounded monthly
• B the account that pays an annual interest of

Q5:

Amelia opened a retirement account with APR in the year 2000. Her initial deposit was . How much will the account be worth in 2025 if the interest compounds monthly? How much more would she make if the interest compounded continuously?

• A , \$299.19
• B , \$182.21
• C , \$176.20
• D , \$449.75
• E , \$124.13

Q6:

An investment account with an annual interest rate of was opened with an initial deposit of . Compare the values of the account after 9 years when the interest is compounded annually, quarterly, monthly, and continuously.

• Aannually: , quarterly: , monthly: , continuously:
• Bannually: , quarterly: , monthly: , continuously:
• Cannually: , quarterly: , monthly: , continuously:
• Dannually: , quarterly: , monthly: , continuously:
• Eannually: , quarterly: , monthly: , continuously:

Q7:

A man deposited 1 569 LE in a bank account with an interest rate of per year. Determine how much money was in the account 5 years later, given that the interest was compounded quarterly. Give your answer correct to one decimal place.

Q8:

A man deposited 8 694 LE in a bank account with an interest rate of per year. Determine how much money was in the account 10 years later, given that the interest was compounded annually. Give your answer correct to two decimal places.

Q9:

A man deposited 3 049 LE in a bank account with an interest rate of per year. Determine how much money was in the account 7 years later, given that the interest was compounded every 4 months. Give your answer correct to two decimal places.

Q10:

The price of an article increases by every year. Given that its original price was 3 652 LE, determine its price after 7 years. Give your answer to the nearest pound.

• A 1 887 LE
• B 27 865 LE
• C 23 263 LE
• D 6 676 LE

Q11:

A man invested 200 000 LE in a project. Each year his investment grows by . Determine the value of his investment after 7 years, giving your answer correct to two decimal places.

Q12:

A man deposited 1 078 LE in a bank account with an interest rate of per year. Determine how much money was in the account 5 years later, given that the interest was compounded monthly. Give your answer correct to one decimal place.

Q13:

Benjamin wants to save for a down payment on a home. How much will he need to invest in an account with APR, compounding daily, in order to reach his goal in 5 years?

Q14:

Charlotte deposits \$1 500 into a retirement fund each year. The fund earns annual interest, compounded monthly. If she opened her account when she was 19 years old, how much will she have saved by the time she is 55? How much of that amount will be interest earned?

• A\$28 429.43, \$10 429.43
• B\$4 008.23, \$2 508.23
• C\$4 008.23, \$5 508.23
• D\$28 429.43, \$26 929.43
• E\$28 000.43, \$26 500.43

Q15:

The amount of money in an account doubles every 9 years. If is deposited into the account, how much will be in the account after 27 years?

Q16:

Jennifer decides to put in a savings account with an interest rate of per year. What is the total amount of money that Jennifer will have in her savings account after years?

• A
• B
• C
• D
• E

Q17:

James invests at a interest rate per year, compounded quarterly. Find the balance after 10 years.

• A
• B
• C
• D
• E

Q18:

Liam deposits \$100 in a savings account that gives him a interest on his savings each month. Daniel has \$350 in a cashing account that he withdraws \$5 from each month. After how many months do the two have approximately the same bank balance?