| Date | May 2009 | Marks available | 3 | Reference code | 09M.1.sl.TZ2.8 |
| Level | SL only | Paper | 1 | Time zone | TZ2 |
| Command term | Calculate | Question number | 8 | Adapted from | N/A |
Question
Inge borrows € 4500 for 2 years.
Bank 1 charges compound interest at a rate of 15 % per annum, compounded quarterly.
Calculate the total amount to be repaid at the end of the 2 years. Give your answer correct to two decimal places.
Markscheme
Note: Financial penalty (FP) applies in this part
\(A = 4500{\left( {1 + \frac{{15}}{{400}}} \right)^{4 \times 2}}\) (M1)(A1)
Note: Award (M1) for substitution into CI formula, (A1) for correct substitution.
(FP) A = € 6041.12 (€ not required) (A1) (C3)
[3 marks]
Examiners report
This is a question that has been tested before but few candidates managed to gain full marks. Compounding the interest quarterly and using the correct compound interest formula appeared to challenge many candidates.
Syllabus sections
Topic 1 - Number and algebra » 1.9 » Financial applications of geometric sequences and series: compound interest.
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