How saving a little each month grows: simple and compound interest

Answer Key - Grade 8 Math Worksheet - Challenge Me

Circle the best answer, or write your answer on the line.

1. 1.

   1.05 × 1.05 × 1.05 × 1.05 × 1.05 ≈ 1.28. Bo compares two pretend accounts that each start with $1,000 and get no deposits. A earns 6% simple interest; B earns 5% compound interest. Which has more after 5 years, and by about how much?

   • Account A, by about $20
   • Account B, by about $20
   • Account A, by about $300
2. 2.

   1.05¹⁰ ≈ 1.63. Esme compares two pretend accounts that each start with $1,000 and get no deposits. A earns 6% simple interest; B earns 5% compound interest. Which has more after 10 years, and by about how much?

   • Account B, by about $630
   • Account B, by about $30
   • Account A, by about $30
3. 3.

   1.04²⁰ ≈ 2.19. Jun compares two pretend accounts that each start with $1,000 and get no deposits. A earns 5% simple interest; B earns 4% compound interest. Which has more after 20 years, and by about how much?

   • Account A, by about $190
   • Account B, by about $190
   • Account B, by about $1,190
4. 4.

   1.08⁵ ≈ 1.47. Kira compares two pretend accounts that each start with $1,000 and get no deposits. A earns 10% simple interest; B earns 8% compound interest. Which has more after 5 years, and by about how much?

   • Account B, by about $30
   • Account A, by about $30
   • Account A, by about $500

5. Read this first

   Growth table

   $100 deposited at the start of each month, 5% a year compounded monthly, balances rounded to the dollar (Years | Deposits so far | Balance): 10 | $12,000 | ≈ $15,593; 20 | $24,000 | ≈ $41,275; 30 | $36,000 | ≈ $83,573.

6. 5.

   Milo reads Ms. Hale's pretend retirement plan, which gets $100 each month. How much more interest does it earn in years 20 to 30 than in years 10 to 20?

   $16,616

7. Growth table

   $30 deposited at the start of each month, 4% a year compounded monthly, balances rounded to the dollar (Years | Deposits so far | Balance): 10 | $3,600 | ≈ $4,432; 20 | $7,200 | ≈ $11,040; 30 | $10,800 | ≈ $20,891.

8. 6.

   Pia reads Ms. Reyes's pretend retirement plan, which gets $30 each month. How much more interest does it earn in years 20 to 30 than in years 10 to 20?

   $3,243

9. Growth table

   Year	Account A	Account B
   1	$130	$125
   2	$160	$156.25
   3	$190	$195.31
   4	$220	$244.14
   5	$250	$305.18

10. 7.

    Ren compares two pretend accounts that each start with $100. A earns 30% simple interest; B earns 25% compound interest. In which year does B first hold more than A?

    3
11. 8.

    Tala compares two pretend accounts that each start with $200. A earns 25% simple interest; B earns 20% compound interest. In which year does B first hold more than A?

    4
12. 9.

    Zee compares two pretend accounts that each start with $100. A earns 20% simple interest; B earns 15% compound interest. In which year does B first hold more than A?

    5
13. 10.

    Ari compares two pretend accounts that each start with $200. A earns 30% simple interest; B earns 20% compound interest. In which year does B first hold more than A?

    6