Compound Interest

Compound Interest Take notes while watching the video in your journals. Then complete the practice examples. Ex 2: Manuel deposited $2,500 into a savings account that pays 4.5% compound interest per year. How much is his investment worth after 4 years? $3000 $2504.50 $2981.30 $503.58 Ex 2b: Manuel deposited $2,500 into a savings account that pays 4.5% compound interest per year. How much interest did he earn after 4 years? $481.30 $500 4.50 $385.38 Ex 3:Jennifer deposits $2,500 into each of two savings accounts.-Account I earns 4.5% annual compound interest-Account II earns 5% annual compound interest Jennifer does not make any additional deposits or withdrawals. What is the sum of the balances of Account I and Account II at the end of 3 years? $2852.92 2894.06 $41.15 $5746.98 Check in! $382.50 $1925.52 $425.52 $1882.50 Sort into either the "Simple Interest" category or the "Compound Interest" category Simple Interest I=Prt Interest is calculated on the principal amount only Compound Interest A=P(1+r)t Interest is calculated on both the principal with the interest earned What is 4% written as a decimal? 40.0 4.0 0.40 0.04 What is 50% written as a decimal? 50.0 5.0 0.50 0.05 What is 100% written as a decimal? 100.0 10.0 1.0 0.10 Match the letter from the interest formulas to the part of the formula it represents. I Simple Interest P Principal r interest rate t time A Amount of money