TRY IT$!$ EXAMPLES $-$ SIMPLE AND COMPOUND INTEREST

Consider $$1,000$ is being invested for $25$ years at $10\%$ interest.

a$.$ Determine the amount in the account after $10$ years if the account earns simple interest.

b$.$ Determine the amount in the account after $10$ years if the account earns interest compounded annually.

Calculate the missing information in the table below.

$\backslash$table$[[,$Interest Amount,Principal or Present Value,Interest Rate,Time$],[2.,?,$$$130,000\mathrm{.}00,8\%,9$ months$],[3.,$$$4,000\mathrm{.}00,?,2\%$ per month,$8$ months$],[4.,$$$1,437\mathrm{.}50,$$$57,500\mathrm{.}00,?$ per year,$4$ months$],[5.,$$$103\mathrm{.}13,$$$1,250\mathrm{.}00,9\%,?$ months$]]$

You are sitting in an office at your local financial institution and the bank officer says to you, $"$We will make you a great deal. If we advance that line of credit and you borrow $$20,000$ today, when you want to repay that balance in $3$ months you will only have to pay us $$20,168\mathrm{.}77,$ which is not much more!" Before answering, you decide to evaluate the statement. Calculate the simple interest rate that the bank officer used in her calculations.

If you invested $$5,000$ for $10$ years at $9\%$ interest compounded quarterly, how much money would you have?

Calculate the amount of money in the account using the table below.

$\backslash$table$[[$Principal$,$Interest Rate,Term$],[$$$7,500,8\%$ compounded quarterly,$3$ years$]]$

Tabitha estimates that she will need $$20,000$ for her daughter's postsecondary education when she turns $18.$ If Tabitha is able to save up to $$8,500,$ how far in advance of her daughter's ${18}^{th}$ birthday would she need to invest the money at $7\mathrm{.}75\%$ compounded semi$-$annually?