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Popular Word Problems >

If Matilda purchases the painting for 10000 dollars and assumes a growth rate of 5% pa calculate the value of the investment after 2 years using compound interest

Solution

I f M a t i l d a p u rc ha ses t h e p ain t in g f or 10000 d o ll a rs an d a ss u m es a g ro wt h r a t e o f 5% p a c a l c u l a t e t h e v a l u e o f t h e in v es t m e n t a f t er 2 ye a rs u s in g co m p o u n d in t eres t

Solution

Amount : 11025

Solution steps

Translate the problem into an equation:

A = 10000 (1 + \frac{0.05}{1})^{1 \cdot 2}

10000 (1 + \frac{0.05}{1})^{1 \cdot 2} = 11025

Amount : 11025

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