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Alex invests £3045 into an account that pays 2.25% compound interest per year.

Work out how much Alex will have in the account after 16 years.
Thanks :)

1 Answer

10 votes

○=> Correct answer :

Money in Alex's account after 16 years =
\boxed{\bold{\color{plum}£4347.11}}

○=> Steps to derive correct answer :

Money invested by Alex = £3045

Percentage of compound interest per annum = 2.25%

We know that :


\tt \: \color{hotpink}A \color{plum} = P {(1 + (r)/(n) )}^(nt)

In this case :

Principal = £3045

Rate = 2.25% = 0.0025

Number of times interest is compounded per year = 1

Time = 16 years

Which means :

Money Alex will have in the account after 16 years :


= \tt3045 ({1 + ( 0.0025)/(1) })^(16)


\color{plum}= \tt £4347.11

Therefore, the money in Alex's account after 16 years = £4347.11

User Brian Lam
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