Search

1 of 8 0-day streak

Compound interest and non-annual periods

Question 1 of 8

Calculator allowed

Ethan deposits $5,347 in a term deposit. The nominal annual rate is 4% p.a., compounded annually, for 3 years

This fictional model has a fixed nominal annual rate and no deposits, withdrawals, repayments or fees after the starting amount. Interest stays in the balance. Keep full calculator precision between periods. Round requested money answers to the nearest cent; give rates and period counts exactly. Displayed table balances are rounded summaries, not new starting values

Use P for the starting amount in dollars, A for the final amount, r for the percentage number per period, and n for the number of periods

(a)1 mark

What is the balance after 3 years? Give your answer to the nearest cent

Format: nearest cent
(b)1 mark

How much interest is earned over the 3-year term? Give your answer to the nearest cent

Format: nearest cent