Interactive practice questions
Which three of the following statements about compound interest are true?
Interest is earned on the principal.
The interest in any time period is calculated using only the original principal.
Interest is earned on any accumulated interest.
The amount of interest earned in any time period changes from one period to the next.
A $\$2090$$2090 investment earns interest at $4.2%$4.2% p.a. compounded annually over $17$17 years. Use the compound interest formula to calculate the value of this investment to the nearest cent.
Sally's investment of $\$8950$$8950 earns interest at $4%$4% p.a. compounded annually over $4$4 years .
What is the amount of interest earned to the nearest cent?
Dave's investment of $\$6000$$6000 earns interest at $2%$2% p.a, compounded annually over $3$3 years.
Answer the following questions by repeated multiplication.