1. You deposit $950 into an account that earns 4 % interest compounded annually. Find the balance in the account after five years. In your last calculation, round to the nearest cent. Simple and Compound Interest COURSE 3 LESSON 6-8 3434 Year Start of Year InterestEnd of Year 1$950.000.0475 950 = 45.125950 + 45.125 = 995.125 2$995.125995.125 + 47.268 = 1,042.3930.0475 995.125 47.268 3$1,042.3931,042.393 + 49.514 = 1,091.9070.0475 1,042.393 49.514 4$1,091.9071,091.907 + 51.866 = 1,143.7730.0475 1,091.907 51.866 5$1,143.7731,143.773 + 54.329 = 1,198.100.0475 1,143.773 54.329 At the end of 5 years, the balance in the account is $1,198.10. 6-8

2. You invest $225 for four years at an interest rate of 6 % compounded annually. What is your final balance? Simple and Compound Interest COURSE 3 LESSON 6-8 1212 B = p(1 + r) n Use the compound interest formula. B = 255(1 + 0.065) 4 Substitute: p = 225, r = 0.065, n = 4. 25510.0654289.45493 Use a calculator. Round to the nearest cent. $289.45 After 4 years, your balance will be $289.45. 6-8

3. Simple and Compound Interest 1.You deposit $80 into an account that earns 6% simple interest. Find the amount of interest earned in 3 years. Then find the final balance after 3 years. 2.You deposit $80 into an account that earns 6% compounded annually. How much will be in the account in 3 years? COURSE 3 LESSON 6-8 $14.40; $94.40 $95.28 6-8