Question

Yumi places 880000 yen in a fixed term investment account which pays 6.5% per annum compounded annually.

a. How much will she have in her account after 6 years?
b. What interest has she earned over this period?

Answer 1

Correct option is

C

Rs.8820

Answer 2

Given,

Amount invested, $\[\left( p \right) = 880000yen\]$

Rate of interest, $\[\left( r \right) = 6.5\% \]$

Solution,

a. How much will she have in her account after 6 years?

$\[a = p{\left( {1 + \frac{r}{{100}}} \right)^n}\]$

$\[ \Rightarrow a = 880000 \times {\left( {1 + \frac{{6.5}}{{100}}} \right)^6}\]$

$\[\begin{array}{l} \Rightarrow a = 880000 \times {\left( {1.065} \right)^6}\\ \Rightarrow a = 1284045.221yen\end{array}\]$

Hence she have $\[1284045.221yen\]$ in her account after 6 years.

b. What interest has she earned over this period?

= Total amount - amount invested

$\[\begin{array}{l} = 1284045.221 - 880000\\ = 404045.221yen\end{array}\]$

Hence she earned interest of $\[404045.221yen\]$.