Mrs Boey deposited $20 000 in a bank that pays 0.8% per annum compound interest compounded half-yearly. Find the total amount of money she will receive at the end of 5 years, leaving your answer to the nearest cent. Answer ... Singapore Budget 2018: GST to be raised from 7% to 9% some time between 2021 and 2025 Shane and Glen came across an article in the newspaper with the headline shown above and made the following comments. Shane: Oh no, the GST will increase by 2% soon! Glen: No! I disagree. It did not increase by 2%, in fact it is MORE than 2%! Whose statement is correct? Support your answer with mathematical calculations. Answer ...

1. Find the half-yearly interest rate and number of compounding periods.

Annual interest rate $=0.8\%$

Half-yearly interest rate $=\dfrac{0.8\%}{2}=0.4\%$

Number of half-years in 5 years $=5\times 2=10$

2. Apply the compound interest formula and round to the nearest cent.

$\text{Amount}=20000\left(1+\dfrac{0.4}{100}\right)^{10}$

$=20000(1.004)^{10}$

$=20816.485\ldots$

To the nearest cent, the amount is $\char36{}20\,816.49$.

1. Find the absolute increase in the GST rate.

Increase in GST rate
$=9\%-7\%=2\text{ percentage points}$

2. Express the increase as a percentage of the original GST rate and decide whose statement is correct.

Percentage increase
$=\frac{2}{7}\times 100\%$
$=28.571\ldots\%\approx 28.6\%$
Since $28.6\%>2\%$, the increase is more than $2\%$.