MYTUTOR SUBJECT ANSWERS

211 views

Mark wants to borrow money to buy a car. His bank offers him a loan of £5,000 to be payed back over 3 years at 4% compound interest. a) Work out the interest acquired in the 2nd year. b) In total how much will Mark end up paying back the bank?

In questions concerning compound interest, interest is added to principle sum at the end of each year. Therefore, the interest increases each year as you are paying interest on interest

a) To work out the interest owed in the second year we need to find 4% of the principle sum plus the first years interest:

In the first year of Mark's loan the interest is 4/100 x £5,000 = 200

Therefore to work out the interest acquired on the loan in the second year:

4/100 x £5,200 = £208

b) The final total owed will be a sum of the total borrowed (£5,000) plus the three years interest. 

We have worked out the first two years interest in part a. The interest in the third year is worked out as follows:

4/100 x £5,408 = £216.32

Therefore the total amount to be payed back to the bank is:

£5,000 + £200 + £208 + £216.32 = £5,624.32

Laura M. 11 Plus Maths tutor, GCSE Maths tutor, 13 plus  Maths tutor,...

5 months ago

Answered by Laura, a GCSE Maths tutor with MyTutor


Still stuck? Get one-to-one help from a personally interviewed subject specialist

451 SUBJECT SPECIALISTS

£22 /hr

Daniel R.

Degree: Mathematics (Bachelors) - Durham University

Subjects offered: Maths, Physics+ 1 more

Maths
Physics
Further Mathematics

“About me I’m a first year student studying Maths with European Studies at Durham. I have recently taken my A levels, achieving A* in Maths and Further Maths, so I am familiar with the course content and what the examiners are looking ...”

£20 /hr

Abigail G.

Degree: Zoology (Bachelors) - Exeter University

Subjects offered: Maths, Geography+ 3 more

Maths
Geography
Chemistry
Biology
-Personal Statements-

“Hi I'm Abi, a 1st year MSci Zoology student at the University of Exeter, Penryn Campus. I am absolutely loving my degree and am learning new and exiting things every second! I thoroughly enjoy anything biological related and am able t...”

£30 /hr

Henri F.

Degree: Aerospace Engineering MEng (Masters) - Bristol University

Subjects offered: Maths, Physics+ 4 more

Maths
Physics
Further Mathematics
Electronics
.STEP.
.PAT.

“About Me I am an Aerospace Engineer currently studying my MEng at the University of Bristol. I have always been fascinated with space, spacecraft and satellites. I intend on going on to complete a PhD specialising inSpacecraft Control...”

About the author

£18 /hr

Laura M.

Degree: Medicine (Other) - Bristol University

Subjects offered: Maths, Geography+ 5 more

Maths
Geography
Chemistry
Biology
.UKCAT.
-Personal Statements-
-Medical School Preparation-

“About me: I am a friendly and enthusiastic fourth year medical student studying at the University of Bristol. I found myself enjoying Maths and Sciences from an early age and eventually decided that it was my calling to be a doctor. W...”

You may also like...

Posts by Laura

Explain why it is important to take a full course of prescribed antibiotics.

Mark wants to borrow money to buy a car. His bank offers him a loan of £5,000 to be payed back over 3 years at 4% compound interest. a) Work out the interest acquired in the 2nd year. b) In total how much will Mark end up paying back the bank?

Other GCSE Maths questions

A picture is bought at a sale for £40. It is laster sold for £50. What is the percentage profit?

Find the inverse of f(x) = 7x+4

A right-angled triangle has base 10cm and height 4cm. What is the area of the triangle?

How do you find the nth term formula for a sequence with non-constant difference?

View GCSE Maths tutors

Cookies:

We use cookies to improve our service. By continuing to use this website, we'll assume that you're OK with this. Dismiss

mtw:mercury1:status:ok