### 13-1: TEKS Practice

• 1. An account has a principal of \$200 and a simple interest rate of 3.7%. The table shows the simple interest earned and the new account balance for 1, 2, and 3 years. Complete the table for the fourth year. • 2. Sergio deposits \$3,100 into a bank account with an annual simple interest rate of 2.6%.

• a. How much in interest does the account earn in 18 months?

• b. What is the balance of the account at that point?

• 3. Zachary deposits \$2,230 in a savings account that earns 3.3% annual interest compounded quarterly. He wants to use the formula B=p(1 + r) n to find the balance after 4 years. What values should he substitute for r and n to do this?

• 4. An investor puts \$900 in an account that pays 5% interest compounded annually. Find the account balance after 8 years. Round to the nearest cent.

• 5. Betty deposits \$300 into an account that earns 5% interest compounded annually. Xavier deposits the same amount into an account that earns 5% simple interest. Compare the account balances after 2 years.

• 6. A customer plans to deposit \$1,000 in a bank account and leave it for 4 years. The customer compares two banks. The first bank offers 2% interest compounded 4 times per year. The second bank offers 2% interest compounded once per year. Which bank offers the better investment for the customer?

• 7.

• a. What is the value of a \$2,480 investment after 6 years at 2.9% annual interest compounded monthly? Round to the nearest cent.

• b. How much does the investment earn in interest?

• 8. Justin deposits \$1,450 in a savings account that earns 3.4% annual interest compounded quarterly. He wants to use the formula B=p(1 + r) n to find the balance after 6 years.

• a. What values should he substitute for r and n to do this?

• b. Suppose the interest were compounded monthly rather than quarterly. How would this affect the values Justin should substitute for r and n?

• 9. Edward deposited \$9,500 into a savings account 2 years ago. The simple interest rate is 5%.

• a. How much money did Edward earn in interest?

• b. What would be his new account balance?

• 10. Reasoning You deposit \$4,400 into a bank account with an annual simple interest rate of 2.1%.

• a. How much in interest does the account earn in 15 months?

• b. What is the balance of the account at that point?

• c. Explain why it is important to use a single unit of time when computing simple interest. Use examples to support your reasoning.

• 11. Error Analysis Isamu deposits \$375 in an account that pays 3% interest compounded monthly. Isamu incorrectly claims that the account balance will be \$761 after 1 year.

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