Question

Mrs. Emily saved RM10000 in a bank. At the end of the eighth year, the amount of money accumulated amounted to RM19992.71. If the bank pays an annual interest of x% for a year compounded every 6 months. Calculate the value of x.

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Jayne

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84 Answers

STEP BY STEP SOLUTION:
Let:
A be the accumulated amount
P be the principal amount
n be the compound
t be the time (in years)
r be the rate
Given:
A = RM 19992.71
P = RM 10000
n = 2
t = 8
r = ?
Solving for rate r as a decimal
r=n\left(\left(\frac{A}{P}\right)^{\frac{1}{nt}}-1\right)
r=2\left(\left(\frac{19992.71}{10000}\right)^{\frac{1}{2(8)}}-1\right)
r = 0.0885
Then convert r to R as a percentage
R = r * 100
R = 0.0885 * 100
R = 8.85%/year
ANSWER:
The bank pays an annual interest of 8.85%

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