Multiple choice

Jeff invested £1100 at an interest of 4% compounded half yearly. In how many years will this money amout to £1237.35?

  1. 1 year

  2. 1.5 years

  3. 2.5 years

  4. 3 years
Reveal answer Fill a bubble to check yourself
B Correct answer
AI explanation

Using the compound interest formula with half-yearly compounding, the amount is 1100 multiplied by (1 + 4/200) raised to the number of compounding periods. We set this equal to 1237.35, which simplifies to (1.02) raised to the number of periods equals 1.1248. Since 1.02 cubed equals 1.1248, there are 3 half-yearly periods, meaning it takes 1.5 years.

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