Finance · Guided Practice

Interest with Varying Time Units

5 questions with answers and video solutions. Try each one before revealing the answer.

1
£4800\displaystyle \pounds 4800 is deposited in an account with an effective rate of interest of 0.4%\displaystyle 0.4\% per month.
Calculate the value of the account after 9\displaystyle 9 months.
Give your answer to the nearest penny.
Video solution coming soon
2
A loan of £15000\displaystyle \pounds 15000 is charged an effective rate of interest of 1.6%\displaystyle 1.6\% per quarter.
No repayments are made.
Calculate the amount owed after 2\displaystyle 2 years.
Give your answer to the nearest penny.
Video solution coming soon
3
£6250\displaystyle \pounds 6250 is invested in a bond with an effective rate of interest of 1.85%\displaystyle 1.85\% per half-year.
Calculate the value of the bond after 3\displaystyle 3 years.
Give your answer to the nearest penny.
Video solution coming soon
4
£2400\displaystyle \pounds 2400 is deposited in an account with an effective rate of interest of 0.25%\displaystyle 0.25\% per month.
Calculate the value of the account after 18\displaystyle 18 months.
Give your answer to the nearest penny.
Video solution coming soon
5
2024 Q1
(1, 2)3 Marks

Bailey takes out a loan for £4000 with an annual effective rate of interest of 29.9%.

(a) Calculate the monthly effective rate of interest.

Bailey makes level monthly repayments of £250 at the end of each month.

(b) Complete the following loan schedule for Bailey's loan to show the loan outstanding at the end of month 2.

Time
(months)
Repayment
(£)
Interest content of repayment (£) Capital content of repayment (£) Loan outstanding
(£)
0 4000.00
1 250.00
2 250.00