Solution-Interest on savings account

Interest on savings account

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Reference no: EM131079424

Ellie uses the products method to check the interest on her savings account. She calculates that she is receiving interest at the rate of approximately 0.015% per day.

Calculate:

1. the annual rate of simple interest paid to Ellie

2. the interest earned on a balance of £12,000:

(i) for two days

(ii) for two years.

From 1 January 2003 to 31 December 2012, the value of Ellie's house increased from £200,000 to £320,000.

Ellie believes that the increase is approximately 4.8% per annum based on compound interest.

(d) Provide a calculation to show if Ellie is correct.

(e) State whether the true rate of compound interest is more than or less than 4.8% per annum.

Reference no: EM131079424

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Interest on savings account

Reference no: EM131079424

Reference no: EM131079424

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