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Seatwork - Simple and Compound Interest

The document contains 4 examples calculating simple and compound interest on principal amounts over different time periods and interest rates, compounded annually or monthly. It shows that compound interest results in higher total amounts than simple interest due to interest earning interest over time. The last two examples are not fully worked out.

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Cyrus Armamento
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52 views2 pages

Seatwork - Simple and Compound Interest

The document contains 4 examples calculating simple and compound interest on principal amounts over different time periods and interest rates, compounded annually or monthly. It shows that compound interest results in higher total amounts than simple interest due to interest earning interest over time. The last two examples are not fully worked out.

Uploaded by

Cyrus Armamento
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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1. P750 at 6.5% for 5 years compounded annually.

Simple Interest: SI = P(r)(t)


P = 750
r = 6.5%
t = 5 years
=750(0.065)(5)
= 243.75

Compound Interest: A = P(1 + r/n) (nt)


P = 750
r = 6.5%
n=1
t=5
A = 750 (1+0.065/1)1*5
= 1027.56

2. P25,000 at 8% for 3 years compounded annually.

Simple Interest: SI = P(r)(t)


P = 25,000
r = 8%
t=3
= 25,000(0.08)(3)
= 6000

Compound Interest: A = P(1 + r/n) (nt)


P = 25,000
r = 8%
n=1
t=3
A = 25,000(1+0.08/1)1*3
= 31492.8

3. P680 at 5.5% for 1.5 years compounded monthly.

Simple Interest: SI = P(r)(t)


P = 680
r = 5.5%
t = 1.5
= 680(0.055)(1.5)
= 56.1

Compound Interest: A = P(1 + r/n) (nt)


P = 680
r = 5.5%
n = 12
t = 1.5
=

4. P1500 at 4.5% for 2 years compounded monthly.

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