Question

Q9.

£4000 is invested at 2% compound interest.
(a) What is the value of the investment after 3 years?

Answer 1

£4244.83

Explanation:

Use the compound amount formula:

A = P(1 + r)^t. Here, P = £4000, r = 0.02 and t = 3 yrs

So: A = £4000(1 + 0.02)^3, which comes to:

A = £4000(1.061) = £4244.83