Multiple choice

Razia invested £500 at ABC bank. If the interest is compunded annually, how long would it take the amount to become £665.50 at the rate of 10% p.a.?

  1. 1 year

  2. 2 years

  3. 3 years

  4. 4 years
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Compound interest formula: A = P(1 + r/100)^n. 665.50 = 500(1 + 0.10)^n. 1.331 = (1.1)^n. Since 1.1^3 = 1.331, n = 3 years.

AI explanation

Using the compound interest formula A = P(1 + R/100)^n, we substitute the given values: 665.50 = 500(1 + 10/100)^n. This simplifies to 665.50/500 = (1.1)^n, or 1.331 = (1.1)^n. Since 1.331 is exactly equal to (1.1)^3, the value of n is 3 years.

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