Multiple choice

Chris deposits $800 in American Express in an investment scheme that offers 8% compound interest in the first year and 10% interest compounded annually after that. What will be the amount received by Chris after 8 years?

  1. $1710
  2. $1684
  3. $1661
  4. $1653
  5. $1611
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Year 1: 800 * 1.08 = 864. Remaining 7 years at 10%: 864 * (1.1)^7 = 864 * 1.9487 = 1683.69, which rounds to 1684.

AI explanation

Using the successive compound interest formula, Amount = Principal * (1 + r1/100) * (1 + r2/100)^n, where the rates are 8% for the first year and 10% for the remaining 7 years. The calculation is Amount = 800 * (1.08) * (1.10)^7 = 864 * 1.9487171. This results in an amount of $1684.

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