MAP4C Lesson 9 Assignment: Compound Interest Calculations and Analysis

This assignment focuses on exploring the characteristics of compound interest. It includes multiple-choice questions where students are tasked with calculating compound interest using provided formulas. Students need to identify the principal, rate, compounding period, and number of periods to determine the final amount, and they are awarded marks for both their correct answers and the clues used in their calculations. The assignment covers various scenarios involving investments, savings accounts, and loans, with different compounding frequencies (semi-annually, monthly, quarterly, annually) to test the student's understanding of how interest accumulates over time. The assignment also includes questions where students are given the final amount and asked to calculate the initial investment, which requires them to apply the compound interest formula in reverse. The assignment covers topics related to linear functions and quadratic functions. The assignment includes true/false questions, problems related to linear functions and quadratic functions.

MAP4C Lesson 9 Assignment
In this assignment you are going to explore the characteristics of compound interest
Make sure you answer all questions in the spaces provided
Part A: Finding the Answer
In this section, you are going to use the formula for calculating compound interest to find the answer.
For each question, answer the question giving the clues that you used in determining your answer. You will be given two
marks – one mark for your correct clues and one mark for the correct answer.
Multiple Choice
Identify the choice that best completes the statement or answers the question.
____ 1. This graph shows the growth of an investment.
What is the initial value of the investment?
a. $2000 b. $2400 c. $2500 d. $3000
Page 1
C. 2500

____ 2. Kyle wants to save for a new motorcycle. He deposits $2500 in a special savings account earning 6.25%
interest per year, compounded semi-annually. How much money will he have at the end of three years?
a. $2998.66 b. $3006.93 c. $3011.21 d. $3014.11
____ 3. A bank is offering a special three-year investment certificate paying 3.25% per year, compounded monthly.
How much interest would you earn by the end of the three years if you deposited $1500 in the account?
a. $146.25 b. $151.05 c. $152.97 d. $153.40
____ 4. You have decided to buy a new plasma TV. To do so, you must use your credit card to pay $1500 of the
purchase price. The credit card company charges interest at a rate of 18.5% per year, compounded monthly.
How much interest will you have to pay when you pay off the loan in one year?
a. $277.50 b. $290.33 c. $302.28 d. $665.48
____ 5. You have to maintain a minimum balance of $750 in your savings account. The interest rate earned on your
savings is 3.75% per year, compounded monthly. What is the least amount of interest you earn over a two-
year period?
a. $28.61 b. $57.30 c. $57.85 d. $58.32
Page 2
Principal: 2500 Rate: 6.5 Compounding Period: 2 Number of periods: 6
Amount: b. 3006.93
Principal: 1500 Rate: 3.25 Compounding Period: 12
Number of periods: 36
Amount: d. 153.40
Principal: 1500 Rate: 18.5 Compounding Period: 12 Number of
periods: 12
Amount: c. 302.28
Principal: 750 Rate: 3.75 Compounding Period: 12 Number of
periods: 24
Amount: d. 58.32

____ 6. You deposited $5000 in an investment fund that pays 4.5% per year, compounded quarterly. How much
interest will you earn over a period of five years?
a. $225.00 b. $228.83 c. $1246.02 d. $1253.75
____ 7. A $2600 investment is made for a three-year period at an interest rate of 6.5% per year, compounded
annually. How much interest will be earned over the term?
a. $169.00 b. $348.99 c. $507.00 d. $540.67
____ 8. To pay for a trip to visit his grandparents, Edward borrowed $1200 at an interest rate of 6.25% per year,
compounded quarterly. How much must he repay if he pays the loan off at the end of one year?
a. $1257.13 b. $1276.78 c. $1358.46 d. $1445.38
____ 9. Roberta has inherited $15 000 and would like to invest the money to pay for new car in two years. If she
invests the money at an interest rate of 5.9% per year, compounded quarterly for this period of time, how
much will she have for the purchase?
a. $15 904.77 b. $16 822.22 c. $16 849.87 d. $16 864.12
Page 3
Principal: 5000 Rate: 4.5 Compounding Period: 4 Number of periods: 20
Amount: d. 1253.75
Principal: 2600 Rate: 6.5 Compounding Period: 3 Number of periods: 3
Amount: d. 540.67
Principal: 1200 Rate: 6.25 Compounding Period: 4 Number of periods: 4
Amount: b. 1276.78
Principal: 1500 Rate: 5.9 Compounding Period: 4 Number of periods: 8
Amount: d.16864.12

____ 10. Danielle’s parents have put away $12 000 to pay for her university education. The money is invested in an
RESP that pays 6.7% per year, compounded monthly. How much will she have for university in four years?
a. $15 553.89 b. $15 676.48 c. $16 596.00 d. $16 759.66
____ 11. David has $9650 put into a special investment fund that has paid, on average, 13.2% per year, compounded
annually, over the last 10 years. At this rate, how much money would David have if he left the money in the
fund for 6 years?
a. $20 305.13 b. $20 778.48 c. $33 341.99 d. $34 647.46
____ 12. You are considering taking a new job. A prospective employer has offered you an annual salary of $16 000
with an increase of 6% after each year of your service. At this rate, how much will you be earning after five
years with the company?
a. $20 199.63 b. $21 411.61 c. $22 696.31 d. $24 058.08
Page 4
Principal: 12000 Rate: 6.7 Compounding Period: 12 Number of periods: 48
Amount: b.
Principal: 9650 Rate: 13.2 Compounding Period: 10 Number of periods: 10
Amount: c
Principal: 16000 Rate: 6% Compounding Period: 12 Number of
periods: 60
Amount: b