# 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.