Question

Sally invests £8000 in a savings account. the account pays 2.8% compound interest per year. What is the value of her investment after 4 years?

Answer 1

Amount after 4 years = 8000(1 + 0.028)^4 =  £8934.34

Answer 2

Answer with Step-by-step explanation:

The total amount is calculated by:

`P(1+r)^n`

where P is the amount invested

r is the rate of interest

and n is the time.

Here, P=£8000

r=0.028

and n=4

Value of investment after 4 years=

`8000(1+0.028)^4\\\\=8000* 1.028^4`

=£8934.34

Hence, Value of investment is:

£8934.34