Question

If £2000 is placed into a bank account that pays 3% compound interest per year, how much will be in the account after 2years?

Answer 1

Hey!

Your answer is £2121.80 in the account!

Explanation:

So to do this, you have to first find out how much would be left after 1 year...

= 3 / 100 x 2000 = £60 *we now add this on to the £2000*

= 2000 + 60 = £2060 *this is what is in the account after 1 YEAR*

Then, find out the amount for the second year!

= 3 / 100 x 2060 = £61.80 *we now add this on to the £2060*

= 2060 + 61.80 = £2121.80 *this is what is in the account after 2 YEARS*

SO AFTER 2 YEARS, THERE IS AN AMOUNT OF £2121.80 IN THE BANK ACCOUNT!

HOPE THIS HELPS!!

Answer 2

3% = 3/100 = 0,03

When it's compount interest it's 1,03 because you gain 3% more from what you already have.

All you need to do
1,03•2000=2060$ for the first year

And then for the second year, you take the actual amount after one year of 3%

1,03•2060=2121,8

After two years, there will be 2121,8$