FMath 12 – Compound Interest is Simple
Name: _________________________
Show all your work as well as your final answer for each questions.
1. $1200 is invested at 3.35% for 10 years. Calculate the final value, FV, and
the total interest, I, earned in each investment scenario:
(a) Simple interest
FV = __________
I = ___________
(b) Compounded Daily
FV = __________
I = ___________
(c) Compounded Monthly
FV = __________
I = ___________
2. Using the Rule of 72, estimate the doubling time for a $5000 investment
compounded weekly at 5.0%. Then, calculate the doubling time to the
nearest month.
Estimate = ______
Calc = __________
3. How many years would it take a $1500 investment to grow to $10 000
compounded daily at 5%?
_______ yrs
4. An investment grows compounded annually to:
$1404.16 after 1 year, $1460.16 after 2 years and $1518.57 after 3 years.
(a) Calculate the annual interest rate used.
_______ %
(b) Calculate the original initial principal of the investment.
$___________