Practice calculating compound interest and using the Rule of 72 to estimate how long it takes money to double.
Read each problem carefully. Show your work in the space provided. Round money answers to the nearest cent when needed.
Estimating growth, doubling time, and interest earned
Financial Literacy - Grade 6-8
- 1
Maya deposits $200 in a savings account that earns 5% interest per year, compounded annually. How much money will she have after 1 year?
- 2
Jalen invests $100 at 10% interest per year, compounded annually. Complete the amounts for the first 3 years: Year 0, Year 1, Year 2, and Year 3.
- 3
Use the Rule of 72 to estimate how many years it will take an investment to double if it earns 6% interest per year.
- 4
Use the Rule of 72 to estimate how many years it will take money to double at 8% interest per year.
- 5
A $500 investment doubles after about 12 years. Use the Rule of 72 to estimate the annual interest rate.
- 6
Which investment doubles faster: Investment A earns 4% interest per year, or Investment B earns 9% interest per year? Use the Rule of 72 to explain.
- 7
Lena puts $300 in an account earning 4% interest per year, compounded annually. What is the account balance after 2 years?
- 8
An account starts with $1,000 and earns 7% interest per year. Use the Rule of 72 to estimate the balance after about 10 years.
- 9
The graph shows two accounts that both start at $100. Account X earns simple interest, and Account Y earns compound interest. Which account has the curved line, and why?
- 10
A savings account earns 3% interest per year, compounded annually. If the starting balance is $400, what is the balance after 1 year and after 2 years?
- 11
Use the Rule of 72 to match each interest rate with its approximate doubling time: 2%, 6%, 12% and 36 years, 12 years, 6 years.
- 12
Noah wants his $250 to grow to about $500 in 8 years. Use the Rule of 72 to estimate the interest rate he would need.