Answer:
A = £5,306.04 (rounded to the nearest penny)Therefore, the value of the investment at the end of 3 years, with compound interest at a rate of 2% per year, is £5,306.04.
Explanation:
We can use the formula for compound interest to calculate the value of the investment at the end of 3 years:A = P(1 + r/n)^(nt)where:
A = the amount after 3 years
P = the principal amount (the initial investment)
r = the annual interest rate (as a decimal)
n = the number of times the interest is compounded per year
t = the number of yearsIn this case:
P = £5000
r = 0.02 (2% as a decimal)
n = 1 (compounded annually)
t = 3Plugging these values into the formula, we get:A = 5000(1 + 0.02/1)^(1*3)
A = 5000(1.02)^3
A = 5000(1.061208)
A = £5,306.04 (rounded to the nearest penny)Therefore, the value of the investment at the end of 3 years, with compound interest at a rate of 2% per year, is £5,306.04.