| Date | May 2012 | Marks available | 3 | Reference code | 12M.1.sl.TZ1.15 |
| Level | SL only | Paper | 1 | Time zone | TZ1 |
| Command term | Find | Question number | 15 | Adapted from | N/A |
Question
Veronica wants to make an investment and accumulate 25 000 EUR over a period of 18 years. She finds two investment options.
Option 2 offers a nominal annual interest rate of 4 %, compounded monthly.
Find the amount that Veronica has to invest with option 2 to have 25 000 EUR in her account after 18 years. Give your answer correct to two decimal places.
Markscheme
\({\text{C}} = {\left( {1 + \frac{{0.04}}{{12}}} \right)^{12 \times 18}} = 25000\) (M1)(A1)
Note: Award (M1) for substitution into a compound interest formula. Award (A1) for correct substitution and equation.
C =12183.39 (EUR) (A1) (C3)
Note: The final (A1) can only be given for seeing the correct figures.
[3 marks]
Examiners report
In part (b) a mark was awarded for substitution of any values into a compound interest formula. This seemed to be as far as the majority of candidates were able to go and few scripts gave the required answer of 12183.39 EUR.
