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4MA1/2FR Jan 2023, Question 23: Compound Interest

Pearson Edexcel International GCSE Mathematics A 4MA1 · Paper 2FR (Foundation) · Calculator · 6 marks

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The question, in short

Teresa invests $2000 for 3 years at 4% yearly compound interest; Sam's investment falls 9% yearly to $1365 after one year. Find Teresa's final amount to the nearest dollar and Sam's initial value T.

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

Part (a) · 3 marks

Calculate the amount in Teresa's account after 3 years of 4% compound interest on $2000, rounded to the nearest dollar.

  1. 11.04 × 2000 = 2080
  2. 21.04 × 2080 = 2163.2
  3. 31.04 × 2163.2 = 2249.728
  4. 42249.728 ≈ 2250

Answer2250

Part (b) · 3 marks

Find the starting value T of Sam's investment, given it decreased by 9% in the first year to $1365.

  1. 1100% − 9% = 91%
  2. 291% = 1365
  3. 31365 ÷ 0.91 = 1500

Answer1500

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