Question

Find the compound interest on £90,000 for 3 years at the rate of 10% per annum compounded anually

Answer 1

Answer: £29,791.00

Explanation:

Use the Equation
`A = P(1+r/n)^(nt)`

P represents principal which is the starting amount.

R represents rate which is the percent increase represented in decimal form.

N represents the number of times compounded per year.

T represents the total time.

The question is asking us to solve for A which is the total amount and we just have to plug in all the other variables given to us and solve and subtract from the original.

A = 90,000(1 + 0.1/1)^(1*3)

A = 90,000(1.1)^3

A = 119,791.00

We have the amount, and now we have to subtract it from the original.

119,791-90,000 = 29791

Answer 2

Explanation:

Final account amount will be ( using compound interest formula)

90 000 (1 + .10)^3 = 119 790 <=== ( 1-% is .10 in decimal)

subtract original amount to find interest = £ 29 790.