Compound Interest, SMB-021

Callum invests $20 000 in a term deposit account that adds 3.8% interest annually, calculated on the account balance at the end of each year.

Calculate the interest paid in the third year of Callum's investment. (3 marks)

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`$818.86`

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`r=3.8% = 0.038`

`text(Using)\ \ FV=PV(1+r)^n :`

`:.\ text(Interest paid in 3rd year)`	`= 22\ 367.74-21\ 548.88`
	`= $818.86`