Compound Interest Flashcards
1
Q
If a bank pays 5% compound interest per annum. If you invest £5200 how much do you have after 4 years?
A
100+5= 105
£5200 X 1.05 to the power of 4= £6320.63
2
Q
The value of a car depreciates by 20% a year. If the car is worth £8500 now how much will it be worth in 2 years?
A
100-20=80
8500 X 0.80 to the power of 2 years= £5440
3
Q
In the first year a cars value decreases by 20%. In every other year the cars value decreases by 12%. The car was brought for £15000 what is the value after 3 years.
A
1st year=
100-20=80%
£15000 X 0.80= £12000
2nd and 3rd year=
100 - 12= 88%
£12000 X 0.88 to the power of 2 years= £9292.80
