Question

Brian invests £7900 into his bank account.

He receives 2. 3% per year compound interest.

How much will Brian have after 5 years?

Give your answer to the nearest penny where appropriate

Answer 1

`~~~~~~ \textit{Compound Interest Earned Amount} \\\\ A=P\left(1+(r)/(n)\right)^(nt) \quad \begin{cases} A=\textit{accumulated amount}\\ P=\textit{original amount deposited}\dotfill &\pounds 7900\\ r=rate\to 2.3\%\to (2.3)/(100)\dotfill &0.023\\ n= \begin{array}{llll} \textit{times it compounds per year}\\ \textit{per year, thus once} \end{array}\dotfill &1\\ t=years\dotfill &5 \end{cases} \\\\\\ A = 7900\left(1+(0.023)/(1)\right)^(1\cdot 5) \implies A=7900(1.023)^5\implies A \approx 8851.26`