Algebra 8-1 Compound Interest
1. If you deposit $800 in an account that pays an annual yield
of 5%,
how much will you have in the
account after:
a.) 2 years _______ b.) 3 years ________
c.)
5 years _______ d.) 10 years ________
e.)
20 years _______ f.) 50 years ________
g.) 100 years
(like you will be around)
__________
2. Joe, Tom, and Rick are each going to open a savings account
at the
Bank of Hickam. The Bank of aHickam
offers an annual yield of 8%.
a.) How much will
each have in his won account after 9 years if
Joe invests
$1, Tom $500, and Rick $3000.
Joe = ______ Tom
= ________ Rick = __________
b.) Looking
closely at the numbers, approximate by how much each
persons account got multiplied.
____________
c.) What does this
tell you about any amount of money that you
invest at 8% for 9 years.
____________________________
d.) Without
calculating it, about how much would $7,000 become if
invested at 85 for 9 years?
________________
3. Fill in the table below for investing $10,000 at the given
rates and years.
Round answers to the nearest dollar.
|
$10,000 |
2% |
3% |
5% |
8% |
10% |
|
3 years |
|
|
|
|
|
|
5 years |
|
|
|
|
|
|
10 years |
|
|
|
|
|
|
15 years |
|
|
|
|
|
4. Is it better to invest at 6% for 5 years or 5% for 6 years? Why?
5. If you invest P dollars at 8% interest for 12 years, by how
much
will your P dollars have been
multiplied?
_________
6. On your TI-83 Plus calculator go to Y= and type in Y1
= 1000 (1.09)^x.
Now go to Tblset (above your
window button). Set your TblStart to 0
and your ΔTbl
to 1. Now hit the Table button (above
your graph key).
Using your arrow keys, scroll down the screen to find the
following.
a.) How many years
until you will have about $2000? _________
b.) How many years
until you will have about $2800? _________
c.) How many years
until you will have about $4000? _________
d.) How many years
until you will have about $5600? _________
7. Repeat Question 6 above, but instead of typing Y1
= 1000 (1.09)^x,
type Y1 = (1.09)^x.
a.) How long until you have twice as much as your
original investment? _____
b.) How long until you have about three times
as much as your original investment? _________
c.) How long until you have about four times
as much as your original investment? _________
d.) How long until you have about eight times
as much as your original investment? _____