Compound and Continuous Interest Worksheet
Explore compound and continuous interest calculations with this Grade 7 math worksheet, including fill-in-the-blanks, multiple choice, and short answer questions.
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Compound and Continuous Interest
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Read each question carefully and answer to the best of your ability. Show your work for short answer questions.
1. Compound interest is calculated on the initial principal and also on the accumulated from previous periods.
2. The formula for compound interest is A = P(1 + r/n)^(nt), where A is the final amount, P is the principal, r is the annual interest rate, n is the number of times interest is per year, and t is the number of years.
3. Continuous interest is a special case of compounding where the interest is calculated and added to the principal an number of times over a period.
4. The formula for continuous interest is A = Pe^(rt), where e is Euler's number, approximately equal to .
1. Which type of interest earns interest on previously earned interest?
Simple Interest
Compound Interest
Fixed Interest
Variable Interest
2. If interest is compounded quarterly, how many times per year is the interest calculated?
1
2
4
12
1. Sarah invests $500 at an annual interest rate of 4% compounded annually. How much money will she have after 2 years? Show your work.
2. John invests $1000 at an annual interest rate of 5% compounded semi-annually. How much money will he have after 1 year? Show your work.
1. Continuous compounding generally results in a higher return than daily compounding for the same interest rate.
True
False
2. The 't' in the compound interest formula represents the total time in months.
True
False