Question 1: Calculate the compound interest earned in 1 year on a £5,000 investment at an annual interest rate of 6% compounded monthly. Provide your answer to the nearest pound.

Answer: 319

Question 2: A savings account has a principal of £2,400. The interest rate is 5% per annum, compounded monthly. Calculate the balance after 6 months.

Answer: 4020

Question 3: If £1,200 is invested at an annual interest rate of 4%, compounded monthly, what is the total amount after 9 months?

Answer: 1216

Question 4: A bank offers a monthly compounded interest rate equivalent to an annual rate of 12%. What is the monthly interest rate?

Answer: 1%

Question 5: Calculate the value of £3,000 after 1 year with a 7% annual interest rate compounded monthly.

Answer: 3214

Question 6: A student invests £1,500 at an interest rate of 8% per annum, compounded monthly. How much will the investment be worth after 12 months?

Answer: 1624

Question 7: Construct a graph to show the growth of an investment of £2,000 at 5% interest compounded monthly over 2 years. Plot the total amount after each quarter.

Answer:

Question 8: A loan of £10,000 is taken out with a 9% annual interest rate compounded monthly. How much will the total debt be after 18 months? Round to the nearest pound.

Answer: 11768

Question 9: A savings account offers a 0.5% interest rate per month. Calculate the annual equivalent interest rate if compounding is monthly.

Answer: 6.17%

Question 10: Identify and correct the mistake in the following calculation: £1,000 invested at 6% per annum compounded monthly for 1 year. The calculated amount is £1,060.

Answer: Interest is compounded, so the amount should be approximately £1,061.

Question 11: Estimate the total amount after 24 months on a £4,000 investment at an annual interest rate of 6%, compounded monthly, using the approximation formula.

Answer: 4774