Question

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 :)

Answer 1

○=> 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