Sophia
p
a
ys into
a
b
a
nk
a
ccount
a
t the end of e
a
ch month. The
a
nnu
al
interest p
aid on money in the
a
ccount is which is compounded monthly.
(
a
) Find the v
alue of her investment
a
fter a
period of ye
ars. [3]
The
a
vera
ge ra
te of infl
a
tion per ye
ar over the ye
ars w
as .
(b) Find
a
n
a
pproxim
a
tion for the re
al interest ra
te for the money
invested in the
a
ccount. [2]
(c) Hence find the re
al v
alue of Sophia
’s investment
a
t the end of
ye
ars.