Question

Toni invests money into an account which pays a fixed rate of compound interest each year. The total value, £V, of her investment after t years is given by the formula:

V = 1350 x 1.04^t
Answer questions a & b

a- How much money did Toni invest in pounds
b- What rate of compound interest is paid each year

Answer 1

Ok, this is a simple compound interest problem.
For A) your answer is 1350. The initial investment, P, is represented by a whole number.
For B) The compound interest is paid at 4%. Look at 1.04. Remember the formula, and subtract the 1 to find the interest rate

Answer 2

Toni invested in pounds= $1350

rate of compound interest=4%

Explanation:

Toni invests money into an account which pays a fixed rate of compound interest each year. The total value, £V, of her investment after t years is given by the formula:

`V = 1350(1.04)^t`

Given equation is in the form of
`A=P(1+r)^t`

where P is the amount invested

'r' is the rate of interest

t is the time taken

`V = 1350(1.04)^t`

P= 1350 is the initial amount invested

1+r= 1.04 (subtract 1 from both sides)

`r=0.04` multiply it by 100 to get percentage

r= 4%