# Savings Account Interest Formula by jessifer

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```									1     Chapter 21.1
Using the simple interest formula and the accumulated simple interest formula, solve:

P = \$500; r = 0.08; t = 6months; I =?

P = \$40; I = \$400; t = 4years; r =?

P = \$100; r = 8%; t = 18months; A =?

A = \$8000; r = 12%; t = 3years; P =?

If \$3000 is invested in a savings account for 4 months at 4.5% interest rate, how
much total interest is earned?
How much will you accumulate on a savings account that has \$500 in it for 3 years
with an interest rate of 5.25%?

2     Chapter 21.2
Using the compound interest formulas and the Rule of 72, solve:

P = \$100; r = 4%; n = monthly; t = 8months; A =?

P = \$1000; r = 5.25%; n = quarterly; t = 3months; A =?

A = \$18000; r = 8.75%; n = semi − annually; t = 2years; P =?

A = \$50000; r = 8.5%; n = annually; t = 3years; P =?

If \$100 is invested into a savings account with a 6% interest rate, and compounded:
(A) annually, (B) quarterly, (C) monthly, what is the amount after 4 years? How much
interest is earned? Which compounding period is the best?
If \$5,000 is invested into a savings account and compounded semi-annually with an
interest rate of 5%, what is the amount after: (A) 2 years, (B) 4 years? How much
interest is earned?
You want to double your investment of \$4,500. How long will that take if the bank
compounds annually? Does that amount of time give you more or less than \$9,000?
(i.e. check it)

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3     Chapter 21.3
Using the continuously compounding formula, solve:

P = \$100; r = 8%; t = 18months; A =?

P = \$6000; r = 6%; t = 8months; A =?

A = \$1000; r = 10%; t = 5years; P =?

A = \$8000; r = 12%; t = 3years; P =?

and solve for the total interest.

4     Chapter 21.4
Using the savings formula with compounding periodic deposit, solve:

d = \$250; r = 8.5%; t = 8months; n = monthly; A =?

d = \$500; r = 6%; t = 2years; n = quarterly; A =?

A = \$10000; r = 11.5%; t = 4years; n = quarterly; d =?

A = \$85000; r = 4.5%; t = 6years; n = monthly; d =?

Stan deposits %250 monthly into a savings account. If he keeps depositing for 2
years, with an interest rate of 4.5%, how much will he have? How much total interest
does he earn?
Jill wants \$5,000 in her savings account after 5 years. How much are her quarterly
deposits if the interest rate is 4.5%? How much total interest does she earn?
If Stan has \$50,000 in his savings account after 10 years, how much is he depositing
monthly if the bank has a 5.75% interest rate?

5     Chapter 21.5
Using the inﬂation, deﬂation, depreciation formula, solve: inﬂation:

P = \$75.00; r = 2.5%; t = 3years; A =?

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P = \$100.00; r = 5.5%; t = 6years; A =?

deﬂation:
P = \$75.00; a = 2.5%; t = 3years; A =?

P = \$100.00; a = 5.5%; t = 6years; A =?

depreciation:
P = \$75.00; r = 2.5%; t = 3years; A =?

P = \$100.00; r = 5.5%; t = 6years; A =?

Know how to use the CPI formula.

6     Chapter 21.6
Using the dividends formula, solve:

D = \$15.00; r = 2.5%; g = 8%; P =?

P = \$210.00; r = 5.5%; g = 2.5%; D =?

P = \$350.00; D = \$25; g = 11.5%; r =?

D = \$100.00; P = \$50, 000; r = 15%; g =?

In 2005, Leah bought stock in the Straw Company. The expected growth rate is
7.5% and the discount rate is 10.3%. If last years dividends were \$25.00, what is the
present value?

7     Chapter 22.1
Using add on loan formulas and discount formulas, solve:

P = \$375, r = 5.6%, n = monthly, t = 3years, I =?, A =?, d =?

P =?, r = 5.6%, n = monthly, t = 4years, I =?, A =?, d = \$280

P = \$150, r =?, n = monthly, t = 5years, I =?, A = \$1500, d =?

Kelly gets an add on loan with an interest rate of 4.5%. She has 4 years to pay

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it oﬀ in monthly installments. If her total interest is \$4,325, how much was her total
loan after the 4 years? How much are her monthly payments?
Chrissy gets a discount loan with an interest rate of 5.4%. She has 6 years to pay
it oﬀ in monthly installments. If her total loan is \$4,325 after the 6 years, how much
was her total interest? How much are her monthly payments?

8    Chapter 22.2
Using repaying loan, and saving to pay oﬀ your loan, solve:

P = \$1500; r = 5.5%; n = quarterly; t = 3years; A =?

A = \$8000; r = 8.7%; n = monthly; t = 2years; P =?

Use the above but solve with saving to pay oﬀ with P = d.
Mark gets a loan for \$9,000. He must repay it in 3 years. His interest rate is 11.25%.
How much does he owe after the 3 years if he is to make quarterly payments? What is
the total interest earned on the loan?
Sam needs to save to repay oﬀ her student loans of \$40,000. He plans on making
monthly payments for 5 years to pay oﬀ the debt. How much are his monthly payments
if the interest rate is 9.99%? What is the total interest earned on the loan?
Know how to use the APR and EAR formulas.

9    Chapter 22.3
Using amortization formula, (equity) solve:

P M T = \$150; r = 9.5%; n = quarterly; t = 10years; A =?

A = \$80000; r = 8.7%; n = monthly; t = 5years; P M T =?

The Mitchell’s have bought a house for \$240,000. They have a 30 year mortgage
to pay the house oﬀ. What are their monthly payments if the interest is 3.7%? How
much equity do they have after the ﬁrst 10 years?
The Mitchell’s have bought a house for \$150,000. They have a 30 year mortgage
to pay the house oﬀ. What are their monthly payments if the interest is 4.5%? How

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much equity do they have after the ﬁrst 15 years?

10     Chapter 22.4
Using amortization formula, (annuity) solve:

P M T = \$250; r = 8.5%; n = quarterly; t = 25years; A =?

A = \$60000; r = 7.7%; n = monthly; t = 30years; P M T =?

How much should you invest in an annuity if you want to receive \$2000 for 10 years
on a monthly base if the annuity has an interest rate of 5.5%?
If you invest \$150,000 into an annuity, how much do you receive monthly for 20
years if the annuity has an interest rate of 6.75%?

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