# 5.01 Compound interest

## Interactive practice questions

$\$3500$$3500 is invested for three years at a rate of 10%10% p.a., compounding annually. a Complete the table row for the Third Year. Balance + interest Total balance Interest earned First year - \3500$$3500 $\$350$$350 Second year \3500+\350$$3500+$350$\$3850$$3850 \385$$385 Third year$\$3850+\$$3850+$$\editable{}$ $\\editable{}$ $\\editable{}$
Fourth year $\\editable{}$ $\\editable{}$ $-$
b

Complete the table row for the Fourth Year to determine the final value of the investment.

Balance + interest Total balance Interest earned
First year $-$ $\$3500$$3500 \350$$350
Second year $\$3500+\$350$$3500+350 \3850$$3850$\$385$$385 Third year \3850+\$$$3850+$$385385 \$$$$42354235 \$$$$423.50423.50 Fourth year \4235$$4235$+$+$\\editable{}$ $\\editable{}$ $-$
c

Calculate the total interest earned over the three years.

Easy
4min

$\$3200$$3200 is invested for three years at a rate of 6%6% p.a., compounding annually. Easy 4min Tara borrows \5000$$5000 at a rate of $4.5%$4.5% p.a, compounding annually.

Easy
3min

Ivan borrows $\$30003000 at a rate of $6.9%$6.9% p.a, compounding annually.

Easy
2min

### Outcomes

#### VCMNA328

Connect the compound interest formula to repeated applications of simple interest using appropriate digital technologies

#### VCMNA359 (10a)

Describe, interpret and sketch parabolas, hyperbolas, circles and exponential functions and their transformations.