BUSINESS, FUR1 2003 VCAA 3 MC

Heather invests `$45\ 000` at `text(4%)` per annum for `5` years compounding annually.
The total amount of interest earned is

A. $1 800

B. $2 100

C. $9 000

D. $9 750

E. $54 750

Show Answers Only

`D`

Show Worked Solution

`text(Using)\ \ A = PR^n`

`text(Sub)\ P = 45000, R = 1.04, n = 5\ text(into)`

`text(equation)`

`A`	`= 45000 xx 1.04^5`
	`= 54749.3806`

`text(Interest)`	`= text(Final Amount − Original Amount)`
`	`= 54749.3806 − 45000`
	`= 9749.3806`
	`~~ 9750`

`=> D`