topic badge

Modelling Compound Interest

Interactive practice questions

The balance of an investment, in dollars, at the end of each year where interest is compounded annually is given by $A_n=1.06A_{n-1}$An=1.06An1, $A_0=5000$A0=5000.

a

State the annual interest rate.

b

Determine the balance at the end of the first year.

c

Use the sequences facility on your calculator to determine the balance at the end of $10$10 years.

Give your answer to the nearest cent.

Easy
3min

The balance of an investment, in dollars, at the beginning of each quarter where interest is compounded quarterly is given by $A_n=1.02A_{n-1}$An=1.02An1, $A_1=5000$A1=5000.

Easy
5min

The balance of an investment, in dollars, at the end of each month where interest is compounded monthly is given by $A_n=1.015A_{n-1}$An=1.015An1, $A_0=2000$A0=2000.

The investment began at the beginning of January 2010.

Easy
7min

$\$5000$$5000 is invested at the beginning of the year in an account that earns $3%$3% per annum interest, compounded annually.

Easy
2min
Sign up to access Practice Questions
Get full access to our content with a Mathspace account

Outcomes

MS1-12-5

makes informed decisions about financial situations likely to be encountered post

What is Mathspace

About Mathspace