Final answer:
Oscar will have approximately £2737.14 in his savings account after 9 years, calculated using the compound interest formula A = P(1 + r/n)^(nt) with a principal of £2000, an annual interest rate of 3.5%, compounded annually.
Step-by-step explanation:
To calculate the final amount in a savings account with compound interest, we can use the formula:
A = P(1 + r/n)nt
Where:
- A is the amount of money accumulated after n years, including interest.
- P is the principal amount (the initial amount of money).
- r is the annual interest rate (decimal).
- n is the number of times that interest is compounded per year.
- t is the time the money is invested for, in years.
In Oscar's case, where he has a principal of £2000, an annual interest rate of 3.5% (or 0.035 in decimal form), compounded annually (n = 1), over 9 years, the formula becomes:
A = 2000(1 + 0.035/1)1*9
Now let's do the calculation:
A = 2000(1 + 0.035)9
= 2000(1.035)9
= 2000 * 1.368569...
After calculating, Oscar will have approximately £2737.14 in his savings account after 9 years. This demonstrates the benefit of compound interest over time.