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0580/42 Feb/Mar 2025, Question 11: Compound Interest

Cambridge IGCSE Mathematics 0580 · Paper 42 (Extended) · Calculator · 5 marks

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The question, in short

Compound interest problems: find the value of $1500 invested at 4.2% per year after 5 years, and find the annual rate x that doubles an investment in 11 years.

Summarised in our own words. Use the official paper for the exact wording and any diagrams.

Part (a) · 2 marks

Calculate the value of a $1500 investment after 5 years at 4.2% per year compound interest.

  1. 1Value = 1500 × (1 + 4.2/100)⁵
  2. 2= 1500 × 1.042⁵
  3. 3= $1842.59

Answer1842.59

Part (b) · 3 marks

Calculate the annual compound interest rate x that doubles an investment over 11 years.

  1. 1(1 + x/100)¹¹ = 2
  2. 21 + x/100 = ¹¹√2 = 1.0650…
  3. 3x = 6.50… ≈ 6.5

Answer6.5

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