Number 4

3 marks · Normal

Manuela invests $1,500 at 3% compound interest per annum for 4 years. Calculate the value of her investment at the end of 4 years. Give your answer to the nearest cent.

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$1,687.14 $ (±0.01)

Common mistakes: multiplies by 0.03 instead of 1.03 each year; forgets to use four powers

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Marking points

M1 · 1 mark · Identifies correct multiplying factor (1.03)

M2 · 1 mark · Raises the multiplying factor to the correct power (4)

A1 · 1 mark · Arrives at correct final answer to nearest cent.

Worked solution

To the nearest cent, $1,687.14.