topic badge
AustraliaNSW
Stage 5.1

7.05 Compound interest

Interactive practice questions

$\$7400$$7400 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 $-$ $\$7400$$7400 $\$740$$740
Second year $\$7400+\$740$$7400+$740 $\$8140$$8140 $\$814$$814
Third year $\$8140+\$$$8140+$$\editable{}$ $\$$$$\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 $-$ $\$7400$$7400 $\$740$$740
Second year $\$7400+\$740$$7400+$740 $\$8140$$8140 $\$814$$814
Third year $\$8140+\$$$8140+$$814$814 $\$$$$8954$8954 $\$$$$895.40$895.40
Fourth year $\$8954$$8954$+$+$\$$$$\editable{}$ $\$$$$\editable{}$ $-$
c

Using the values in the table, how can we calculate the total interest earned over three years?

Select the two correct answers.

Sum up the values in the "Interest earned" column.

A

Calculate $10%$10% of the "Total balance" of the fourth year.

B

Use the greatest value in the "Interest earned" column.

C

Subtract the "Total balance" of the first year from the fourth year.

D
d

Calculate the total interest earned over the three years.

Easy
6min

$\$3500$$3500 is invested for three years at a rate of $10%$10% p.a., compounding annually.

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.

Medium
3min
Sign up to access Practice Questions
Get full access to our content with a Mathspace account

Outcomes

MA5.1-4NA

solves financial problems involving earning, spending and investing money

What is Mathspace

About Mathspace