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Part 4:
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More Complex Arithmetic Skills |
| Compound Interest Again, what follows is a slightly simplified version of the real thing. Interest is added to the principal at the end of each time period and is thus included in the next calculation, just like in the exercises on inflation. Example 4.5a A sum of £12,000 is invested in an account which pays 8% p.a. interest, compounded at the end of each year. The account is closed and the money withdrawn at the end of 4 years. How much is realised? |
