**EG1) I have £50 I get 2% interest, how much will I have after -**

a) 1 year

b) 2 years

c) 5 years

d) 20 years

A) 100% + 2% = 102%

102 divided by 100 = 1.02

50 x 1.02 = £51

B) 51 x 1.02 = £52.02

C) (((52.02 x 1.02) x1.02)x1.02) = £55.20

(((52.02x1.02) = 3 years

(((52.02x1.02)x1.02) = 4 years

(((52.02x1.02)x1.02)x1.02) = 5 years

D) 50 x 1.02 to the power of 20 = £74.29

A = £51

B= £52.02

C= £55.20

D= £74.29

The power is where you need to times a number by another number so many times. For example in D the sum was 50 x 1.02 to the power of 20. The actual sum was 50 x1.02 x1.02 x1.02 x1.02 x1.02 x1.02 x1.02 x1.02 x1.02 x1.02 x1.02 x1.02 x1.02 x1.02 x1.02 x1.02 x1.02 x1.02 x1.02 x1.02 but to simplify it you can do 50 x 1.02 20 times. On a calculator the power button is a x and a little square coloured in and the square is in the right hand corner.

Number of years Sum Amount of Money

1 400x 1.03 = £412

2 400x 1.03 to the power of 2 = £424.36

3

4

8

15

a) 1 year

b) 2 years

c) 5 years

d) 20 years

A) 100% + 2% = 102%

102 divided by 100 = 1.02

50 x 1.02 = £51

B) 51 x 1.02 = £52.02

C) (((52.02 x 1.02) x1.02)x1.02) = £55.20

(((52.02x1.02) = 3 years

(((52.02x1.02)x1.02) = 4 years

(((52.02x1.02)x1.02)x1.02) = 5 years

D) 50 x 1.02 to the power of 20 = £74.29

A = £51

B= £52.02

C= £55.20

D= £74.29

__The power button:__The power is where you need to times a number by another number so many times. For example in D the sum was 50 x 1.02 to the power of 20. The actual sum was 50 x1.02 x1.02 x1.02 x1.02 x1.02 x1.02 x1.02 x1.02 x1.02 x1.02 x1.02 x1.02 x1.02 x1.02 x1.02 x1.02 x1.02 x1.02 x1.02 x1.02 but to simplify it you can do 50 x 1.02 20 times. On a calculator the power button is a x and a little square coloured in and the square is in the right hand corner.

__Questions__

1. Deposit £400 in a account offering 3% compound interest. Fill in the missing gaps:Number of years Sum Amount of Money

1 400x 1.03 = £412

2 400x 1.03 to the power of 2 = £424.36

3

4

8

15