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.