Multiple choice

At the rate of 6% interest compounded yearly, how long will it take to make £5955 from principle amount of £5,000?

  1. 2 years

  2. 3 years

  3. 4 years

  4. 5 years
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 5955 = 5000(1.06)^n. Dividing gives 1.191 = (1.06)^n. Since 1.06^3 is approximately 1.191, n = 3 years.

AI explanation

Using the compound interest formula A = P(1 + R/100)^n, we substitute the given values to get 5955 = 5000 * (1.06)^n. This simplifies to (1.06)^n = 1.191, and since 1.06 cubed is 1.191016, n equals 3. The time required is 3 years.

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