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 :)

Question

asked Oct 2, 2022 76.5k views

1 Answer

Brian Lam · Answer 1 · 2022-10-09T08:46:12+0000

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

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