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Erykah invests £12000 in an account paying compound interest for 3 years.

 

In the first year the rate of interest is x%

At the end of the first year the value of Erykah's investment is £12240

 

In the second and third years the rate of interest is x/2% (it's a fraction idk how to type that!)

 

What is the value of Erykah's investment at the end of three years?

 

 
 Jan 2, 2019
 #1
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The interest rate can be found as :

 

(12240 - 12000] / 12000  =  .02   =  2%

 

So.....the interest rate after this is  2% / 2  = 1% = .01

 

So.....the amount after 3 years is

 

12240  ( 1 + r) ^2   =   

 

12240 ( 1 + .01)^2  =

 

12240 (1.01)^2  = 

 

£12486.02

 

 

cool cool cool

 Jan 2, 2019

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