Question

HELP PLEASE!

Brian invests £1200 into a savings account. The bank gives 3% compound interest for the first 2 years and 5% thereafter. How much will Brian have after 6 years to the nearest pound

Answer 1

So, the amount invested after 6 years is £1547

Explanation:

We can use formula

`A=P(1+r_1)^(t_1)(1+r_2)^(t_2)`

where

P is money invested

r1 is first interest rate

t1 is time for r1

r2 is second interest rate

t2 is time for r2

`P=1200`

`r_1=0.03`

`t_1=2`

`r_2=0.05`

`t_2=4`

now, we can plug values

`A=1200(1+0.03)^(2)(1+0.05)^(4)`

`A=1547`