Hope anyone can assist me in this

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secondary 4 | E Maths
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secondary 4 E Maths Singapore

Hope anyone can assist me in this

Date Posted: 4 years ago

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The bank pays for interest on Peter’s deposit, but earns from interest on Paul’s loan.
$2080 = Paul’s compounded interest - Peter’s compounded interest
At the end of two years, Peter withdraws: (1 + 3/100)^2 * 50000 = 53045
Peter’s interest: 53045 - 50000 = 3045
$2080 = Paul’s compounded interest - $3045
Paul’s compounded interest = $2080 + $3045 = $5125
Paul’s loan: (1 + r/100)^2 * 50000 = 50000 + 5125
(1 + r/100)^2 * 50000 = 55125
(1 + r/100)^2 = 1.1025
1 + r/100 = 1.05
r/100 = 0.05
r = 5

Hope this helps!

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