Simple + Compound Interest

Analyze the table that shows the total value over time of $1,000 invested in accounts earning 4% interest. Describe the differences in the accounts. With your your shoulder partner, write one similarity and one difference between simple and compound interest in the blank below. Then, discuss your answers with your group. Word Sort: Determine whether you would prefer the principal of each account to earn simple interest or compound interest. Simple Interest College Savings Regular Savings Account Retirement Savings Compound Interest Car Loan Student Loan Mortgage (Home Loan) Suppose you invest $1000 in an account that earns 4.00% simple interest. How much interest is earned after 15 years? What is the total value of the investment after 15 years? Analyze the worked example: a. Determine the total amount of the investment after 25 years.b. Determine the total value of the investment after 50 years. Determine the total value of a $500 investment earning 3% simple interest over 7 years. Write out all of your work by showing the steps of your equation and explain your reasoning. Determine the total value of a $50,000 investment earning 3% simple interest over 15 years. Write out all of your work by showing the steps of your equation and explain your reasoning. If a $900 investment earns $78.75 in interest over 7 years, what is the simple interest rate on the account? Write out all of your work by showing the steps of your equation and explain your reasoning. Suppose you invest $1000 in an account that earns 4% compound interest. Analyze the worked example. Determine the interest and balance for Years 4 and 5 and fill in on the image of the table. Determine the total value of a $500 investment earning 3% compound interest over 7 years. Write out all of your work by showing the steps of your equation and explain your reasoning. Determine the total value of a $50,000 investment earning 3% compound interest over 15 years. Write out all of your work by showing the steps of your equation and explain your reasoning. Why does an investment with compound interest increase so much more quickly than the same investment with simple interest?