Problem

13 Sakira invested $£ 3550$ in a savings account for 3 years. She was paid $2.6 \%$ per annum compound interest for each of the first 2 years. She was paid $R \%$ interest for the third year. Sakira had $£ 3819.21$ in her savings account at the end of the 3 years. Work out the value of $R$. Give your answer correct to 1 decimal place.

Solution

Step 1 :Let's first calculate the amount in Sakira's account after the first 2 years with 2.6% compound interest: \(A = P(1 + r)^n\)

Step 2 :\(A = 3550(1 + 0.026)^2\)

Step 3 :\(A = 3736.9998\)

Step 4 :Now, we need to find the interest rate for the third year by comparing the amount after the third year with the amount after the second year: \(3819.21 = 3736.9998(1 + R)\)

Step 5 :\(R = \frac{3819.21}{3736.9998} - 1\)

Step 6 :\(R = 0.02199898431891811\)

Step 7 :Finally, we round the interest rate to 1 decimal place: \(R = 2.2\%\)

Step 8 :\(\boxed{R = 2.2\%}\)

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Source: https://solvelyapp.com/problems/30518/

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