Interest and Borrowing

Hong Kong

Stage 1 - Stage 3

Isabelle is considering whether it would be greatly beneficial for her to invest her money now rather than $5$5 years down the track. For an initial investment of $\$3000$$3000, the function $A=3000\left(1.026\right)^t$`A`=3000(1.026)`t` models how value her money will grow to in $t$`t` years.

Regardless of whether she invests now or in $5$5 years time, she will close the account when she retires (more than $8$8 years in the future).

How many times more will her closing balance be if she starts investing now rather than $5$5 years down the track? Give your answer correct to two decimal places.

Easy

Approx 4 minutes

At what annual compound interest rate, $r$`r`, must Joanne invest $\$220$$220 if she wishes to triple her money in $17$17 years? Give your answer as a percentage correct to two decimal places.

At what annual compound interest rate, $r$`r`, must you invest your money so that $\$1000$$1000 grows twofold in $16$16 years? Give your answer as a percentage, correct to 2 decimal places.

Find the principal, $P$`P`, that would need to be invested at $6%$6% p.a. compounded semiannually to accumulate $\$7600$$7600 in $9$9 years. Give your answer to the nearest dollar.

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