Practice the questions of McGraw Hill Math Grade 8 Answer Key PDF Lesson 6.9 Simple and Compound Interest to secure good marks & knowledge in the exams.
McGraw-Hill Math Grade 8 Answer Key Lesson 6.9 Simple and Compound Interest
Exercises Calculate
Question 1.
How much interest would you earn if you put $500 in a bank for 15 years and received simple interest of 8%?
Answer:
$ 600.00
Explanation:
Simple Interest SI = \(\frac{P X R X T}{100}\)
P = Principle Amount
R = Rate of interest in %
T = Time (Number of years)
Amount = Principle + Simple Interest
SI = Amount – Principle
P= $500
R = 8%
T = 15 yrs
Simple Interest SI = \(\frac{P X R X T}{100}\)
= \(\frac{500 X 8 X 15}{100}\)
= 5 x 8 x 15
= 600
Question 2.
Calculate the simple interest on a bank account where you deposit $500 and earn 12% a year for 5 years.
Answer:
$300.00
Explanation:
Simple Interest SI = \(\frac{P X R X T}{100}\)
P = Principle Amount
R = Rate of interest in %
T = Time (Number of years)
Amount = Principle + Simple Interest
SI = Amount – Principle
P= $500
R = 12%
T = 5 yrs
Simple Interest SI = \(\frac{P X R X T}{100}\)
= \(\frac{500 X 12 X 5}{100}\)
= 5 x 12 x 5
= 300
Question 3.
Calculate the ending balance of your savings account if you deposit $400 and earn simple interest of 7% for 5 years.
Answer:
$540.0
Explanation:
Simple Interest SI = \(\frac{P X R X T}{100}\)
P = Principle Amount
R = Rate of interest in %
T = Time (Number of years)
Amount = Principle + Simple Interest
SI = Amount – Principle
P= $400
R = 7%
T = 5 yrs
Simple Interest SI = \(\frac{P X R X T}{100}\)
= \(\frac{400 X 7 X 5}{100}\)
= 4 x 7 x 5
= 140
the ending balance = Principle + interest
A = 400 + 140 = 540
Question 4.
Calculate the ending balance of your savings account if you deposited $1,000 and earned simple interest of 6% for 6 years.
Answer:
$1360.00
Explanation:
P = Principle Amount
R = Rate of interest in %
T = Time (Number of years)
Amount = Principle + Simple Interest
SI = Amount – Principle
P= $1000
R = 6%
T = 6 yrs
Simple Interest SI = \(\frac{P X R X T}{100}\)
= \(\frac{1000 X 6 X 6}{100}\)
= 10 x 6 x 6
= 360
the ending balance = Principle + interest
A = $1000 + $360 = $1360
Exercises Calculate
Question 5.
Calculate the interest earned over a 5-year period when you deposit $2,000 and earn compound interest of 8% per year.
Answer:
$938.66
Explanation:
Compound Interest CI = P [ 1 + \(\frac{R}{100}\) ]n – 1 ]
P = Principle Amount
R = Rate of interest in %
T = Time (Number of years)
P= $1000
R = 8%
n = 5 yrs
Compound Interest CI = P [ 1 + \(\frac{R}{100}\) ]n – 1 ]
CI = 2000 [ 1 + \(\frac{8}{100}\)]5 – 1 ]
=2000 \(\frac{108}{100}\)5 – 1 ]
= 2000 x 0.469
= $938.66
Question 6.
How much interest would you earn if you put $500 in a bank for 20 years and received a compound interest rate of 4%?
Answer:
$595.56
Explanation:
Compound Interest CI = P [ 1 + \(\frac{R}{100}\) ]n – 1 ]
P = Principle Amount
R = Rate of interest in %
T = Time (Number of years)
P= $500
R = 4%
n = 20 yrs
Compound Interest CI = P [ 1 + \(\frac{R}{100}\) ]n – 1 ]
CI = 500 [ 1 + \(\frac{4}{100}\)]20 – 1 ]
=500 \(\frac{108}{100}\)5 – 1 ]
= 500 [ 2.19 – 1]
= 500 x 1.19
= $595.56
Question 7.
How much money would you owe if you borrowed $2,000 for 5 years, with a compound interest rate of 28%, and did not make any payments during that period?
Answer:
$6871.95
Explanation:
Compound Interest CI = P [ 1 + \(\frac{R}{100}\) ]n – 1 ]
P = Principle Amount
R = Rate of interest in %
T = Time (Number of years)
P= $2000
R = 28%
n = 5 yrs
Compound Interest CI = P [ 1 + \(\frac{R}{100}\) ]n – 1 ]
CI = 2000 [ 1 + \(\frac{28}{100}\)]5 – 1 ]
=2000 \(\frac{128}{100}\)5 – 1 ]
= 2000 x 3.435
= $6871.95
Question 8.
Is it better to receive compounded interest for 7 years at 12% on your balance of $500, or to receive the same rate of simple interest for 9 years on that same balance?
Answer:
7 years at 12%
Balance
Compound interest $1105.34
Simple interest $1040.00
Explanation:
Compound Interest CI = P [ 1 + \(\frac{R}{100}\) ]n – 1 ]
P= $500
R = 12%
n = 7 yrs
Compound Interest CI = P [ 1 + \(\frac{R}{100}\) ]n – 1 ]
CI = 500 [ 1 + \(\frac{12}{100}\)]7 – 1 ]
=500 \(\frac{112}{100}\)7 – 1 ]
= 500[2.210 – 1]
= 500 x 1.210
= $605.34
the ending balance = Principle + Compound interest
A = $500 + $605.34 = $1,105.34
Amount = Principle + Simple Interest
SI = Amount – Principle
P= $500
R = 12%
T = 9 yrs
Simple Interest SI = \(\frac{P X R X T}{100}\)
= \(\frac{500 X 12 X 9}{100}\)
= 5 x 12 x 9
= 540.00
the ending balance = Principle + Simple interest
A = $500 + $540 = $1040.00