A sum of 2000 dinars is invested at 5% compound interest per year. What is the total after 2 years?
Answer and explanation
Correct answer: C. 2205
- Step 1: Each year the amount is multiplied by .
- Step 2: After 2 years: 2000 x = 2205.
Answer
2205.
Why not the others: 2200: simple interest was used instead of compound interest. 2201: the interest was calculated once and then adjusted incorrectly. 200: this is the interest only, not the total.
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