# Compounding Interest

ID: vamur-zipin
Illustrative Mathematics, CC BY 4.0
Subject: Algebra, Algebra 2
Standards: HSF-BF.A.1.a

18 questions

# Compounding Interest

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You owe 12% interest each year on a $500 loan. If you make no payments and take no additional loans, what will the loan balance be after 5 years? 1) Write an expression to represent the balance. 2) Evaluate it to find the answer in dollars. Show Work ##### Resizing Images Andre and Mai need to enlarge two images for a group project. The two images are the same size. Andre makes a scaled copy of his image, increasing the lengths by 10%. It was still a little too small, so he increases the lengths by 10% again. Mai says, “If I scale my image and increase the lengths by 20%, our images will be exactly the same size.” 3) Do you agree with Mai? True or false? Write below. 4) Explain or show your reasoning. ##### Earning Interest A bank account has a monthly interest rate of 1% and initial balance of$1,000. Any earned interest is added to the account and no other deposits or withdrawals are made.

5) What is the account balance after 6 months?

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7) What is the account balance after 1 year?

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9) What is the account balance after 2 years?

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11) What is the account balance after 5 years?

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13) Write an equation expressing the account balance (﻿$a$﻿) in terms of the number of months (﻿$m$﻿). Assume that all interest earned continues to be added to the account and no other deposits or withdrawals are made.

14) How much interest will the account earn in 1 year?

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15) What percentage of the initial balance is that?

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