Multiple choice

A plot of land costs £60000 today. Its value increases by 10% per annum. Find its value after 5 years.

  1. £96600

  2. £96610.40

  3. £96628.60

  4. £96630.60
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The formula for compound interest is A = P(1 + r/100)^n. Here, P = 60000, r = 10, and n = 5. Calculating 60000 * (1.1)^5 gives 60000 * 1.61051 = 96630.60.

AI explanation

To find the future value of the plot, use the compound interest formula: Final Value = Present Value * (1 + Rate/100)^n. Substituting the given numbers gives 60000 * (1 + 0.10)^5, which is 60000 * 1.61051. Multiplying these values results in a final worth of 96630.60 after 5 years.

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