Question

An investment grows by 3% per year for 20 years. By what percent does it increase over the 20-year period?
Dont you do 3% x 1.09 = [answer] x 1.09 = etc etc 20 times? Or is there an easier way to do it? The title of the chapter is Compound Interest, so I'm assuming that's how they want it.

Answer 1

I mean 3% x 1.03, not 1.09.

Answer 2

\[(1+0.03)^{20} = (1.03)^{20} = 1.806111235 \approx 180.61 \%\]
It increases by 80.611 %.

Answer 3

thanks :D