Calculate the interest on borrowing £40 for 3 years if the compound interest rate is 5% per year.

The method for finding compound interest is: Original Amount x MultiplierTime
So, from the question we know that: Original Amount= 40, Time= 3 years, so we say 3
Next we need to work out the multiplier:
The compound interest rate is 5% per year, so we do 100% + 5% = 105%
To find the multiplier we divide this by 100, so 105 / 100 = 1.05The multiplier is 1.05
Hence, following the method, we know that
40 x 1.053 = 46.305
As this is a problem involving money, all rounding should be done to 2 d.p. to represent the pence
So the answer is: £46.31

Answered by Kathleen B. Maths tutor

2826 Views

See similar Maths GCSE tutors

Related Maths GCSE answers

All answers ▸

Differentiate sin(x)cos(x)


The point P has coordinates (3, 4) The point Q has coordinates (a, b) A line perpendicular to PQ is given by the equation 3x + 2y = 7 Find an expression for b in terms of a.


Solve the simultaneous equations '2X+Y=7' and '3X-Y=8'


A ball, dropped vertically, falls d metres in t seconds. d is directly proportional to the square of t. The ball drops 45 metres in the first 3 seconds. How many metres does the ball drop in the next 7 seconds?


We're here to help

contact us iconContact usWhatsapp logoMessage us on Whatsapptelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

© MyTutorWeb Ltd 2013–2025

Terms & Conditions|Privacy Policy
Cookie Preferences