Question

Find the compand invest when £200 is invested at 9% for 5 years

Answer 1

£107.72

Explanation:

Given

`P = 200` -- Principal

`r = 9\%` -- Rate

`t = 5\ years` -- Time

`n = 1` -- compounded once in a year

Required

Determine the compound interest

This is calculated using:

`I = P(1 + (r)/(n))^(nt) - P`

`I = 200(1 + (9\%)/(1))^(1*5) - 200`

`I = 200(1 + (0.09)/(1))^5 - 200`

`I = 200(1 + 0.09)^5 - 200`

`I = 200(1.09)^5 - 200`

`I = 307.72 - 200`

`I = 107.72`

Hence, the total interest earned is £107.72