Ratna invests £1200 for 2 years in a bank account paying r % per year compound interest - OCR - GCSE Maths - Question 15 - 2018 - Paper 1

Substituting the values we have:

• A = £1379.02,
• P = £1200,
• n = 2,

this gives us:

$1379.02 = 1200(1 + \frac{r}{100})^2$

To isolate the term with r, divide both sides by 1200:

$1 + \frac{r}{100} = \sqrt{\frac{1379.02}{1200}}$

Calculating the right-hand side:

$1 + \frac{r}{100} \approx \sqrt{1.14901667} \approx 1.073 \text{ (to 3 decimal places)}$

Subtract 1 from both sides:

$\frac{r}{100} = 1.073 - 1 \approx 0.073$

Multiplying by 100 gives:

$r \approx 7.3 ext{ (to 1 decimal place)}$

Thus, the value of r is approximately 7.3%.