Question

Sally invests £8000 in a savings account.

The account pays 2.8% compound interest per year.
Work out the value of her investment after 4 years.
Give your answer to the nearest penny.

Answer 1

£8934.34

Explanation:

`8000 * 1.028^4 = 8934.34`

rounding to 2dp

if trunctuated at 2dp however, 8934.33

the number is multiplied by 1.028 to the power of four as you go through the equation four times, so it would be the same as

x * n * n * n * n, where it would simplify to x * n^4