Wally gets £5 pocket money

He puts it the bank for a year and earns

interest of 5%

How much money does he have by the end of

the year?

£5 X 1.05

£5.05

Wally wants to buy a CD for £10

He has £8 in the bank

If interest rates are 7%, how long

will he need to save for until he can afford the

CD?

£8(1.07)x=£10

We could try and solve this be trail and error……

If x is 5 (5 years) we will have £11.22

Too much……if x is 4 years, we will have £10.50

Nearly…….if x is 3.5 years, we will have £10.13...

……or…..we can use logs………this is A Level

Maths!!£8(1.07)x=£10

(1.07)x=1.25

XLog101.07=Log101.25

X=3.3 years