 5.01 Compound interest

Interactive practice questions

$\$3500$$3500 is invested for three years at a rate of 10%10% p.a., compounding annually. a Complete the table below to determine the final value of the investment. Balance + interest Total balance Interest earned First year - \3500$$3500 $\$350$$350 Second year \3500+\350$$3500+$350$\$3850$$3850 \385$$385 Third year$\$3850+\$$3850+$$\editable{}$ $\\editable{}$ $\\editable{}$
Fourth year $\$4235$$4235++\$$$$\editable{} \$$$$\editable{} - b Calculate the total interest earned over the three years. Easy Approx 4 minutes Sign up to try all questions \3200$$3200 is invested for three years at a rate of $6%$6% p.a., compounding annually.

Tara borrows $\$5000$$5000 at a rate of 4.5%4.5% p.a, compounding annually. Ivan borrows \3000$$3000 at a rate of $6.9%$6.9% p.a, compounding annually.

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.