Download Name ______ Honors Brief Calc Period ____ 6.2 WS Compound

Name _____________
Period ____
Compound Interest
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Honors Brief Calc
6.2 WS
Compound Interest
Compound Continuously
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Present Value
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1. Find the amount that results when $100 is invested at 4% compounded quarterly after a period
of 2 years.
2. Find the amount that results when $500 is invested at 8% compounded quarterly after a period
of 2.5 years.
3. Find the amount that results when $600 is invested at 5% compounded daily after a period of 3
years.
4. Find the amount that results when $10 is invested at 2% compounded continuously after a
period of 2 years.
5. Find the amount that results when $100 is invested at 3% compounded continuously after a
period of 2.25 years.
6. Find the principal needed now to get $100, that is, the present value, after 2 years at 2%
compounded monthly.
7. Find the principal needed now to get $1000, that is, the present value, after 2.5 years at 6%
compounded daily.
8. Find the principal needed now to get $600, that is, the present value, after 2 years at 4%
compounded quarterly.
9. Find the principal needed now to get $80, that is, the present value, after 3.25 years at 2%
compounded continuously.
10. Find the principal needed now to get $400, that is, the present value, after 1 year at 4%
compounded continuously.
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11. Which of the two rates would yield the larger amount in 1 year, 6% compounded quarterly or
6.25% compounded annually? [Hint: Start with a principal of $10,000 in each instance.]
12. Which of the two rates would yield the larger amount in 1 year, 9% compounded monthly or
8.8% compounded daily? [Hint: Start with a principal of $10,000 in each instance.]
13. Find the effective rate of interest for 5% compounded quarterly.
14. Find the effective rate of interest for 5% compounded continuously.
15. What rate of interest compounded annually is required to double an investment in 3 years?
16. What rate of interest compounded annually is required to triple an investment in 5 years?
17a. How long does it take for an investment to double in value if it is invested at 8%
compounded monthly?
b. How long does it take if the interest is compounded continuously?