TUTORIAL 2.

3: COMPOUND INTEREST
REVIEW QUESTIONS

1. Find the interest earned if RM7,500 is invested for six years at 6.4% compounded quarterly.
(RM3,477.67)

2. Aris saved RM25,000 at 8% compounded monthly. Two years later, he withdrew RM14,000
from the savings. Find the amount left in the account. (RM15,322.20)

3. Two years ago, Siew Kit deposited RMY in a savings account that paid interest at 5.2%
compounded quarterly. Today, another RM4,000 is deposited into the same account. If the
accumulated amount in the account three years from now is RM17,618.20, find the value of
Y. (RM10,000)

4. At what rate compounded semi-annually will RM2,000 become RM3,500 in five years?
(11.51%)

5. Simon invested RM5,000 into an account that pays 5% compounded semi-annually. He

intended to keep the account untouched for five years. However, after three years, he had to
withdraw RM3,000. Find the amount left in the account five years from the time he made his
investment. (RM3,088.98)

6. Find the future value and interest earned if RM10,000 is invested for three years at 6%
compounded monthly. (RM11,966.81; RM1,966.81)

7. RM600 is invested for 4 years 10 months. This investment is offered interest rates of 9%
compounded every three months for the first 2 years and 7% compounded monthly for the
rest of the period. Calculate the amount at the end of the investment period. How much
interest was earned? (RM873.66; RM273.66)

8. RM3,000 is invested for 5 years at 5% compounded semi-annually. Find the amount at the end
of 5 years and the interest earned. (RM3,828.84; RM828.84)

9. Ah Chong invests RM2,600 in a fund that promises to give interest of 6% compounded semi-
annually. Find the amount at the end of 4 years. (RM3,293.60)

10. Find the interest on RM2,000 for three years at 6% compounded semi-annually. (RM388.10)

11. Find the future value and interest earned if RM1,000 is invested for 4 years at 5% compounded
monthly. (RM1,220.90; RM220.90)

12. Ms Faridah invested RM8,000 at 7% compounded annually for six years. Find the interest
earned. (RM4,005.84)