Question

How much interest will be earned in a bank account with £3850 that pays 1.3% interest each year how much will there be after 6 years

Answer 1

Results are below

Explanation:

Giving the following information:

Initial investment (PV)= £3,850

Number of periods (n)= 6 years

Interst rate (i)= 1.3% = 0.013

First, we will calculate the future value (FV), by using the following formula:

FV= PV*(1+i)^n

FV= 3,850*(1.013^6)

FV= £4,160.23

Now, by difference, the interest earned:

Interest earned= 4,160.23 - 3,850= £310.23