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Marie invests £8000 in an account for one year - Edexcel - GCSE Maths - Question 11 - 2019 - Paper 3
Question 11
Marie invests £8000 in an account for one year. At the end of the year, interest is added to her account. Marie pays tax on this interest at a rate of 20%. She pays ... show full transcript
Worked Solution & Example Answer:Marie invests £8000 in an account for one year - Edexcel - GCSE Maths - Question 11 - 2019 - Paper 3
Step 1
Calculate the Amount of Interest Before Tax
Answer
To find the amount of interest before tax, we start with the tax paid. Since Marie pays 20% tax on her interest, we can set up the equation:
Let the amount of interest before tax be denoted as I.
From the question, we know:
[ 0.20I = 28.80 ]
Solving for I, we get:
[ I = \frac{28.80}{0.20} = 144.00 ]
Thus, the interest before tax is £144.00.
Step 2
Determine the Interest Rate
Answer
Now, we will calculate the percentage interest rate using the formula for the interest rate:
[ \text{Interest Rate} = \left( \frac{\text{Interest}}{\text{Principal}} \right) \times 100 ]
Here, the principal amount is £8000, and the interest earned before tax is £144.00. Plugging in these values:
[ \text{Interest Rate} = \left( \frac{144.00}{8000} \right) \times 100 ]
Calculating this yields:
[ \text{Interest Rate} = 0.018 \times 100 = 1.8% ]
Thus, the percentage interest rate for the account is 1.8%.