Unit 12 Lesson 3 : Compound Interest

Question 1

Identification:

refers to the sum of interests of prior periods computed on the original or principal amount and each of the successive periods on both the principal and the interest.

Answer 1

Compound interest

Question 2

Identification:

a time interval it takes for the money to be converted or to earn interest in a year.

Answer 2

Period

Question 3

Complete the table.

Period | Frequency
|
Annually | ?
? | 2
Quarterly | ?
? | 6
Monthly | ?
? | ?
Daily | ?

Answer 3

Period | Frequency
|
Annually | 1
Semianually | 2
Quarterly | 4
Bimonthly | 6
Monthly | 12
Semimonthly | 24
Daily | 360

Question 4

Identification:

is called the interest rate per compounding period. It is equal to the nominal rate divided by the compounding period in a year

Answer 4

Periodic rate

Question 5

Identification:

the accumulated value of the principal and all interests amounts of prior periods. Typically calculated first before determining the net interest on the original loan or investment.

Answer 5

Compound amount

Question 6

Identification:

is calculated as a rhe difference between the compound amount and the original or principal amount.

Answer 6

Compound interest