Higher June 2019 Paper 4 Q10
10 Claudia invests £25 000 at a rate of 2% per year compound interest.
Calculate the total amount of interest she will have earned after 5 years.
Give your answer correct to the nearest penny. [4]
| Answer | Marks | Part marks and guidance | |
|---|---|---|---|
| 2 602.02 cao | 4 | B3 for 27 602.02 soi by 2 602[.02…] as final answer or M2 for \(25\,000 \times (1.02)^5\) oe implied by 27 602[.02…] see appendix or M1 for \(25\,000 \times (1.02)^k\) oe implied by 26 010 \((k \ne 5\) and \(k \geqslant 2)\) see appendix | |
Appendix: Question 10
Year on year method
| working | total | interest | year |
|---|---|---|---|
| 25000 × 1.02 | 25500 | 500 | year 1 |
| 25500 × 1.02 | 26010 | 510 | year 2 |
| 26010 × 1.02 | 26530.2 | 520.2 | year 3 |
| 26530.2 × 1.02 | 27060.804 | 530.604 | year 4 |
| 27060.804 × 1.02 | 27602.02008 | 541.216 | year 5 |
values without working correct to 3 sf imply method
(corrected from the printed mark scheme: year 5 is printed as “27060.806 × 1.02” with total “27602.020085”)