1. what is the amount of interest earned after two years on a $100 deposit paying 4 percent simple interest annually? $8.00 $4.08 $8.16 $4.00 2. what is the amount of compound interest earned after three years on a $100 deposit paying 8 percent interest annually? $24.00 $8.00 $16.64 $25.97 3. a business just took out a loan for $100,000 at 10% interest. if the business pays the loan off in three months, how much did the business pay in interest? $2,500.00 $10.00 $250.00 $10,000.00 4. what is the annual percentage yield (apy) for a deposit paying 5 percent interest with monthly compounding? 5.00% 5.12% 79.59% 0.42%

Explanation:

1. The amount earned each year is 4% × $100 = $4. After 2 years, the account has earned 2×$4.00 = $8.00.

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2. If the account earned simple interest, it would earn 8% × $100 = $8.00 each year. After 3 years, the interest would total $24.00. Since the interest is compounded, the interest also earns interest and the total amount of interest is more than $24.00. The appropriate answer choice is $25.97.

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3. If the business had taken a year to pay off the loan, it would have paid in interest ...

  10% × $100,000 = $10,000

Since the loan was paid off in 1/4 year, the amount of interest paid is 1/4 that amount, so is

  (1/4) × $10,000 = $2,500

answer may be d i think

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