IXL | Compound interest | 7th grade math

Maggie has

in an account. The interest rate is 10% compounded annually.

To the nearest cent, how much will she have in 1 year?

Use the formula

(

)

where B is the balance (final amount), p is the principal (starting amount), r is the interest rate expressed as a decimal, and t is the time in years.

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Learn with an example

question

Evelyn deposited

in an account earning 10% interest compounded annually.

To the nearest cent, how much interest will she earn in 1 year?

Use the formula

(

)

where B is the balance (final amount), p is the principal (starting amount), r is the interest rate expressed as a decimal, and t is the time in years.

key idea

You can use this formula when working with compound interest:

(

)

In this formula, B is the balance (final amount), p is the principal (starting amount), r is the interest rate expressed as a decimal, and t is the time in years.

The interest is the balance minus the principal.

solution

Write the rate as a decimal.

10%

0.10

Calculate the balance.

(

)

(

0.10

)

(

1.10

)

(

1.10

)

Now use this to find the interest, which is the balance minus the principal.

–

The interest will be

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Work it out

Not feeling ready yet? These can help:

D.5Evaluate powers with decimal bases

O.2Convert between percents, fractions, and decimals

R.7Evaluate nonlinear expressions

D.3Multiply decimals

D.1Add and subtract decimals

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