In this lesson, we will learn how to solve problems involving compound interest.

Students will be able to

Q1:

An account pays 5% interest every 3 months. On an initial deposit of 𝑀dollars, what is the amount after 𝑡 years?

Q2:

The value of an antique painting increases every year. The painting is currently worth $12,000, and it is expected to be worth $20,000 in 8 years’ time.

Write an equation that can be used to find 𝑟, the rate at which its value increases.

Q3:

Michael invests $200 in an account that pays an annual interest rate of 5%, compounded monthly. Write an equation he could use to work out 𝑉, the value of his investment in 3 years’ time.

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