Interest and Borrowing

Hong Kong

Stage 1 - Stage 3

$\$3000$$3000 is invested at $4%$4% p.a., compounded annually. The table below tracks the growth of the principal over three years.

Time Period $n$n (years) |
Value at beginning of time period | Value at end of time period | Interest earned in time period |
---|---|---|---|

$1$1 | $\$3000$$3000 | $\text{A}$A | $\text{B}$B |

$2$2 | $\text{C}$C | $\$3244.80$$3244.80 | $\text{D}$D |

$3$3 | $\$3244.80$$3244.80 | $\$3374.59$$3374.59 | $\text{E}$E |

a

What value should go in cell $\text{A}$A?

b

What value should go in cell $\text{B}$B?

c

What value should go in cell $\text{C}$C?

d

What value should go in cell $\text{D}$D?

e

What value should go in cell $\text{E}$E?

f

What is the total interest earned over the three years?

Easy

Approx 6 minutes

Dave's investment of $\$6000$$6000 earns interest at $2%$2% p.a, compounded annually over $3$3 years.

Answer the following questions by repeated multiplication.

A $\$2090$$2090 investment earns interest at $4.2%$4.2% p.a. compounded annually over $17$17 years. Use the compound interest formula to calculate the value of this investment to the nearest cent.

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