Section 1

Self-Check 1

Use the Simple Interest - Compound Interest Calculator to answer the following questions.

1. Suppose you had $4000 to invest. Compare the difference in earnings between a simple and a compound investment after 20 years for an annual interest rate of 4%. Assume the interest period is annual. Answer
   
   
2. Repeat question 1, but assume interest is calculated semi-annually. Explain why the results are the same for simple interest but different for compound interest. Answer
   
   
3. 
   
   
   1. Explain why you would be able to connect the midpoint of each bar of the simple interest graph without lifting, moving, or rotating your ruler or some other similar tool. Answer
      
      
   2. Explain why you would not be able to connect the midpoint of each bar of the compound interest graph without lifting, moving, or rotating your ruler or some other similar tool. Answer