Compound growth questions, worked year by year

One question of this type, worked in full

Try the question before you read on. The steps take the fastest route that still shows the reasoning, and the last one is the answer the drill marks.

A service has 800 active accounts and grows by 10 percent in each of the next 2 years. How many active accounts does it have at the end of that period?

1. Grow the first year in one multiplication: 800 × 1.10 = 880 accounts.
2. Grow the second year from 880 rather than from the opening base: 880 × 1.10 = 968 accounts.

Answer: 968 accounts. Testonome practice pace: 65 seconds for a question like this.

Four ways this question type goes wrong

Each question offers these alongside the right answer, and the review names which one you took.

• Rate added up

  Adding the rate up across the periods instead of compounding it, so each one is measured against the original base.

• One year only

  Applying the growth once and stopping, so the remaining periods are never counted.

• Growth, not the total

  Reporting the amount gained rather than the amount there is at the end.

• Rate read as accounts

  Adding the rate to the base as though a percentage were a quantity.

What the review gives you after you submit

You get the working for every question, the answer you chose beside the right one, and the reason the option you picked is wrong. Nothing is sent anywhere while you work.

Other numerical skills you can drill

• Percentage change
• Reverse percentage