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Stage 5.1-2

10.05 The compound interest formula

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+$$385$385 $\$$$$4235$4235 $\$$$$423.50$423.50
Fourth year $\$4235$$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 $\$3000$$3000 at a rate of $6.9%$6.9% p.a, compounding annually.

Easy
2min
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MA5.2-4NA

solves financial problems involving compound interest

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