Edexcel IGCSE Math A 1.6.HB compound interest problems

Practise compound-interest questions by setting up repeated multipliers, taking roots and rounding the final rate or amount.

Exam points

Set up compound equations using yearly multipliers and the given final amount.
Use roots to find repeated yearly rates from a final amount after several years.
Compare compound interest with ratio-based interest information from another bank.

[Maximum number: 3]

Himari invests 200000 yen for 3 years in a savings account paying compound interest.
The rate of interest is 1.8% for the first year and x % for each of the second year and the third year.

The value of the investment at the end of the third year is 209754 yen.
Work out the value of x
Give your answer correct to one decimal place.

$200000\times1.018=203600$ $\sqrt{\frac{209754}{203600}}=1.015000\ldots$ x=1.5

Final answer:
1.5

Accept $1.500045971\ldots$ or better.

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1.6.HB Compound interest problems question 1