Wanjiru invests KSh 50000 at 10% per annum compound interest. How much is it worth after 2 years?

Answer and explanation

Correct answer: C. KSh 60500

  1. Step 1: Use A = P(1 + r/100)^n = 50000 x (1.1)^2. Step 2. A = KSh 60500. Answer: KSh 60500. Why not the others: KSh 60000: That uses simple interest, which does not add earlier interest to the amount. KSh 10000: That is only the total simple interest, not the amount. KSh 10500: That is the compound interest earned, without the original sum.

Practise more Compound interest.

Free questions with an explanation for every one, and full timed Kenya KCSE mock tests.

All Compound interest questionsTake a mock test

More Compound interest questions