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    Simple and compound interest calculation

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    1.) What is the incorrect description of a slope?
    a. The slope between two points is the change in y divided by the change in x.
    b. The slope between two pints is the rise over run.
    c. A slope in a linear function is a rate.
    d. A slope is the change in the input divided by the change in the output.
    e. The slope between two points is the horizontal distance divided by the vertical distance.

    1.) If we invest $70,000, compounded quarterly at 12%, how much is in the account after 2 years, 6 months?

    2.) If we need $70,000 in 2 years, 6 months, compounded quarterly at 12%, how much should we invest now?

    3.) You received a graduation present of $1,000,000 in the form of a special 40 year savings bond with an annual interest rate of 6%, compounded continuously. If the gift will be worth one million dollars in 40 years, what is it worth right now, at the present time?

    4.)The population of Pumpkin City was 100,000 in 1990 and 90,000 in 1995. If the population continues to decay exponentially at the same rate, estimate the population in 2000.

    5.) A new home was purchased in 2000 for $200,000. The homeowner has experienced an exponential increase in the value of her home at the rate of 9% per year. Based on this rate, how much will her home be worth in 2010?

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    Solution Summary

    The expert examines simple and compound interest calculations.