1MA0 Higher November 2014 Paper 2 Q14
*14 Peter has £20 000 to invest in a savings account for 2 years.
He finds information about two savings accounts.
| Bonus Saver | Fixed Rate |
|---|---|
| Compound interest 4% for the first year then 1.5% each year | Compound interest 2.5% each year |
Peter wants to have as much money as possible in his savings account at the end of 2 years.
Which of these savings accounts should he choose? (4)
| Working | Answer | Mark | Notes |
|---|---|---|---|
| \(1.025^2 = 1.050625\) \(1.04 \times 1.015 = 1.0556\) | Bonus Saver with correct comparable values | 4 | M1 for a method to calculate 4% or 2.5% of 20000 (= 800 or 20800 or 500 or 20500) M1 for a method to calculate using a compound interest method, eg \(1.025^2\) oe or 1.04 followed by 1.015 oe A1 for 1.050625 or 1.0556 or 10556 or 556 or 21112 or 21012.5 or 1112 or 1012.5 C1 for a correct decision in a statement with two correct comparable values. NB all final money values can be rounded or truncated to nearest integer or left unrounded. |