Introduction to Business

Back to May

Entry Task

Instruction: - Discussed in Class

Most savings accounts give interest using compound interest.  This means that the interest earned is added to the balance.  Then the next time interest is figured it includes the interest earned last time.  Most saving accounts figure interest 4 times a year (Quarterly).

All interest rates are for one year.  So if you are figuring quarterly interest you only use 1/4th of the interest rate.

Assignments - Assignment List

In Word create the tables below.  The interest rate is 5% and is figured quarterly. 

Figure what the balance would be using Simple Interest?

Answer the following Questions.

• You just deposited $1,000 into a savings account earning 3% compound interest.  The bank figures interest quarterly.  What would your balance be after 2 years?  Show your work.

• You open a savings account with $100 earning 2.5% compound interest.  The bank figures interest every 6 months.  If you were to continue to deposit $100 every month for the next 3 years, what would the account balance be in 3 years.   Show your work.

Turn-in at the end of the Hour