NZ Level 6 (NZC) Level 1 (NCEA)

Compound Interest - Compounding Variations

Valentina's investment of $\$8000$$8000 earns interest at $2%$2% p.a., compounded semiannually over $2$2 years. Answer the following questions by repeated multiplication.

a

What is the value of the investment after $2$2 years, to the nearest cent?

b

What is the amount of interest earned to the nearest cent?

Easy

Approx 4 minutes

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Apply everyday compounding rates

Apply numeric reasoning in solving problems