- Section A, Table 1:
- Year 1: Calculation: $1,530 × 1.02 = $1,560.60; Amount at end: $1,560.60
- Year 2: Calculation: $1,560.60 × 1.02 = $1,591.81; Amount at end: $1,591.81
- Year 3: Calculation: $1,591.81 × 1.02 = $1,623.65; Amount at end: $1,623.65
- Year 4: Calculation: $1,623.65 × 1.02 = $1,656.12; Amount at end: $1,656.12
- Section A, Table 2:
- Year 1: Calculation: $2,999 × 1.035 = $3,103.97; Amount at end: $3,103.97
- Year 2: Calculation: $3,103.97 × 1.035 = $3,212.60; Amount at end: $3,212.60
- Year 3: Calculation: $3,212.60 × 1.035 = $3,325.04; Amount at end: $3,325.04
- Year 4: Calculation: $3,325.04 × 1.035 = $3,441.42; Amount at end: $3,441.42
- Question 1: Formula: A = P(1 + r/100)^n
- Question 2: Rearranged for r: r = 100 × [(A/P)^(1/n) - 1]
- Section B, Left Table:
- n=3, $720, 4%: Amount after n years: $720 × (1.04)^3 = $809.97
- n=6, $400, 3%: Amount after n years: $400 × (1.03)^6 = $477.62
- n=8, $1,800, 2.1%: Amount after n years: $1,800 × (1.021)^8 = $2,125.57
- Section B, Right Table:
- n=7, $7,850, 6.4%: Amount after n years: $7,850 × (1.064)^7 = $12,158.95
- n=5, $3,999, 3.05%: Amount after n years: $3,999 × (1.0305)^5 = $4,646.66
- n=4, $10,045, 4.5%: Amount after n years: $10,045 × (1.045)^4 = $11,983.34
Parent Tip: Review the logic above to help your child master the concept of compound interest formula worksheet.
