Multiple choice

In a bank, the interest is compounded annually at the rate of 10% per annum. In how many years will a sum of £5000 amount to £6655?

  1. 4 years

  2. 3 years

  3. 2 years

  4. 1 year
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Using the compound interest formula A = P(1 + r/100)^n, we have 6655 = 5000(1 + 0.10)^n. Dividing by 5000 gives 1.331 = (1.1)^n, and since 1.1^3 = 1.331, n = 3.

AI explanation

Using the compound interest formula A = P(1 + R/100)^n, we have 6655 = 5000 * (1 + 10/100)^n. Simplifying this gives 1.331 = (1.1)^n. Recognizing that 1.1^3 equals 1.331, we find that the time required is 3 years.

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