Discussion
10 000 invested at 10 per cent for 5 years grows to about
Answer: C
Correct answer: 16 105
\[ F = 10\,000\,(1.10)^5 = 10\,000 \times 1.6105 = 16\,105. \] Simple interest would have given 15 000, and the difference of 1105 is the interest earned on interest - small over five years and dominant over thirty, which is the whole argument of compounding.
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