Algebra II

Classwork

12.5 Compounding Interest

Name:______________________________
1. If interest is compounded continuously at 4.5% for 7 years, how much will a $2000
investment be worth at the end of 7 years?

2. Kelly plans to put her graduation money into an account and leave it there for 4 years
while she goes to college. She receives $750 in graduation money that she puts it into an
account that earns 4.25% interest compounded semi-annually. How much will be in
Kellys account at the end of four years?

Algebra II
Classwork

12.5 Compounding Interest

Name:______________________________
1. If interest is compounded continuously at 4.5% for 7 years, how much will a $2000
investment be worth at the end of 7 years?

2. Kelly plans to put her graduation money into an account and leave it there for 4 years
while she goes to college. She receives $750 in graduation money that she puts it into an
account that earns 4.25% interest compounded semi-annually. How much will be in
Kellys account at the end of four years?

3. Suppose you put $500 in a savings account that compounds continuously at an annual
interest rate of 5%. Let t be the number of years that the money has been on deposit.
Assuming no other deposits are made, which function models the growth of the balance
of the account? How much money would be in the account after 4 years?

4. Todd puts $100 in a savings account when he is 17 years old. He never makes any
deposits or withdrawals. The account has a 6% interest rate, compounded monthly. How
much will be in his account when he is 80 years old?

3. Suppose you put $500 in a savings account that compounds continuously at an annual
interest rate of 5%. Let t be the number of years that the money has been on deposit.
Assuming no other deposits are made, which function models the growth of the balance
of the account? How much money would be in the account after 4 years?

4. Todd puts $100 in a savings account when he is 5 years old. He never makes any
deposits or withdrawals. The account has a 6% interest rate, compounded monthly. How
much will be in his account when he is 80 years old?