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4MA1/1H Jan 2021, Question 7: Compound Interest

Pearson Edexcel International GCSE Mathematics A 4MA1 · Paper 1H (Higher) · Calculator · 6 marks

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The question, in short

Chen invests 40000 yuan at 3.5% compound interest for 3 years; Wang's investment falls 6.5% yearly to 30481 yuan after one year. Find Chen's final value and Wang's starting amount P.

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Part (a) · 3 marks

Calculate the value of Chen's 40000 yuan investment after 3 years at 3.5% compound interest, rounded to the nearest yuan.

  1. 140 000 × 1.035 = 41 400
  2. 241 400 × 1.035 = 42 849
  3. 342 849 × 1.035 = 44 348.715
  4. 444 348.715 rounded to the nearest yuan = 44 349

Answer44 349

Part (b) · 3 marks

Find the initial amount P that decreased by 6.5% in one year to become 30481 yuan.

  1. 1A 6.5% decrease means multiply by 1 − 0.065 = 0.935.
  2. 2So P × 0.935 = 30 481
  3. 3P = 30 481 ÷ 0.935 = 32 600

Answer32 600

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