1000 shekels are invested for 2 years at 20% compound interest per year. What is the amount after 2 years?
Answer and explanation
Correct answer: A. 1440
- Step 1: After year 1: 1000 x 1.2 = 1200.
- Step 2: After year 2: 1200 x 1.2 = 1440.
Answer
1440.
Why not the others: 1400 is simple interest; 400 is only the simple interest earned; 1200 is the amount after one year.
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