+0  
 
0
250
1
avatar

katy invests £2000 in a savings account for 3 years

The account pays compound interest at an annual rate of

2.5% for the first year

x% for the second year

x% for the third year

There is a total amount of £2124.46 in the savings account at the end of 3 years.

work out the rate of interest in the second year

Guest Jun 15, 2017
 #1
avatar
0

2,000 x 1.025 =2,050 Principal + interest @ 2.50% for the first year.

2,124.46 / 2,050 =1.03632195...... Compound rate of return for years 2 and 3

1.03632195^1/2 =~1.018 - 1 x 100 =1.8% Interest rate for 2nd and 3rd year.

Check: 2,000 x 1.025 x 1.018 x 1.018 =2,124.46.

Guest Jun 15, 2017

19 Online Users

New Privacy Policy

We use cookies to personalise content and advertisements and to analyse access to our website. Furthermore, our partners for online advertising receive information about your use of our website.
For more information: our cookie policy and privacy policy.