Banking Vocabulary
A bank account controlled by 2 or more people.
Joint Bank Account
What are the four simple interest formulas?
I=PRT
T= I/PR
R=I/PT
P=I/RT
Convert 15 months into years.
1.25 years
Determine the value of 'n' if interest is compounded semi-annually
n=2
You borrowed $95 for 1 year at 5.2% interest that is compounded semi annually. What will you pay back in full?
$100.00
The amount of money you currently have in your bank account.
Account Balance
Determine the interest earned given the following information:
P = $1000
r = 5%
t = 3 years
I = $150
Sophia invested $5000 in a GIC earning 7.8% interest over 36 months. How much interest did she earn? How much did she have in total?
Interest = $1170
Total = $6170
Determine the values of P, r, n, and t given the following information:
Jessica has saved $30,000 for a down payment on a house. She wants to purchase a house in the next three years. She invests her $30,000 in an investment of 2.4% compounded quarterly. How much money will her investment be worth in three years?
P = $30,000
r = 0.024
n = 4
t = 3
You invested your allowance of $270 which gets 15% compounded annually for 3 years. How much will you have in 3 years?
$410.64
A loan used to finance the purchase of a property, typically paid back over a long period of time with interest.
Mortgage
Determine the simple interest earned in the following scenario:
$4,500 GIC invested at 3.9% simple interest for 2 years
$351.00
If $900 in interest was made on an investment earning 3% for 96 months, what was the principal amount?
$3750
Determine the values of P, r, n, and t given the following information:
Your 6 and 1/4 year investment of $1,450 at 5.4% compounded monthly brought you a grand total of?
P = $1450
r = 0.054
n = 12
t = 6.25
You invested $52,400 at 6% compounded monthly for 5 years. What is your total return on this investment?
$70679.75
Generally operates as a substitute for cash. The owner can pay for goods and services by ‘borrowing’ money that they will have to pay back.
Credit Card
How much money did Rose invest if she earned $4000 after investing her money for 5 years at a rate of 10%?
She invested $8000
Alexia borrowed $8000 for 4 years to make home improvements. If she repaid a total of $10,320, at what interest rate did she borrow the money?
7.25%
Determine the values of P, r, n, t in the compound interest formula given the following information:
You gave your friend a $43,000 loan for 130 weeks at 3% compounded annually.
P = $43,000
r = 0.03
n = 1
t = 2.5 years
$500,000 is invested in an account that pays 2% interest, compounded annually. Determine the value after 15 months.
$512,531.10
A share of ownership in a company. As the company earns profits and grows, the value you own increases, and you may be able to sell it for a profit. However, if the company does poorly, the value you own may decrease, and you may lose money.
Stock
Amir invested $8000 in a mutual fund for 5 years. She earned $3000 in interest. At what rate was the money invested at?
7.5%
Mary borrowed $10,000 for 730 days to purchase a car. If she repaid a total of $11,050, at what interest rate did she borrow the money?
5.25%
Determine the values of P, r, n, and t given the following information:
Your investment of $18,100 at 13.6% compounded weekly for 7 1/2 years will be worth how much?
P = $18,100
r = 0.136
n = 52
t = 7.5
James has $10,000 he wants to invest for 5 years.
Bank A offers him a simple interest account that pays 5% interest.
Bank B offers him a compound interest account that pays 4% interest compounded semi-annually.
Which account should he choose?
Bank B = $12189.94
Bank A is the better choice.