Question

Dan invests £8000 into his bank account.

He receives 2% per year compound interest.
How much will Dan have after 3 years?
Give your answer to the nearest penny where appropriate.

Answer 1

£8489.66

use a=p(1+(r/n))^nt

p (principal ampunt)= £8000

r (annual rate of interest as a decimal)= 2% which is written as a decimal 0.02

t= 3 years

n (number of times it is compunded a year)= 1

sub those values into the formula

A= 8000(1+0.02)^3

A=£8489.66

Answer 2

£8,489.66

Explanation:

1+ 0.2=1.02

8000x1.02 ^3= £8489.664

simplified=£8,489.66

Hope it helped! :)