Question

John invests £200,000 in a savings account for 3 years. The account pays compound interest at a rate of 2 % per annum. Calculate the total amount of interest Katy will get at the end of 3 years.

Answer 1

£212,000

Explanation:

Step one:

Given data

P=£200,000

rate= 2%

time= 3years

Step two:

compound interest

A=P(1+r)^t

substitute

A=200,000(1+0.02)^3

A=200000(1.02)^3

A==200,000*1.06

A=£212,000