Ayesha invests £ at compound interest per year. How much is in the account after years, to the nearest penny?
Answer and explanation
Correct answer: B. £1,687.30
- Step 1: A increase is a multiplier of .
- Step 2: After years: .
- Step 3: This is £1,687.30.
Answer
£1,687.30.
Why not the others: £1,680.00: This is simple interest: of £ for three years, which does not add interest to the interest. £4,116.00: This uses a multiplier of rather than . £1,622.40: This only applies the multiplier twice, which is two years of growth.
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