Final answer:
To calculate the total amount of interest Elok will get at the end of 4 years, we need to use the compound interest formula. Plugging in the given values, the total interest comes out to be £18,480.30.
Step-by-step explanation:
To calculate the total amount of interest Elok will get at the end of 4 years, we will use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
- A is the final amount
- P is the principal amount (£300,000)
- r is the annual interest rate (1.5%)
- n is the number of times that interest is compounded per year (assuming it is compounded annually)
- t is the number of years
Plugging in the values, we get:
A = £300,000(1 + 0.015/1)^(1*4)
Simplifying the equation:
A = £300,000(1 + 0.015)^4
A = £300,000(1.015)^4
A = £300,000(1.061601)
A = £318,480.30
To calculate the total amount of interest, we subtract the principal amount from the final amount:
Total interest = £318,480.30 - £300,000
Total interest = £18,480.30