Question

Mark invests £12000 in a savings account. the account pays 1.5% compound interest per year. work out the value of her investment after two years?

Answer 1

FV= £12,362.7

Explanation:

Giving the following information:

Initial investment (PV)= £12,000

Number of periods (n)= 2 years

Interest rate (i)= 1.5% = 0.015

To calculate the Future Value, we need to use the following formula:

FV= PV*(1 + i)^n

FV= 12,000*(1.015^2)

FV= £12,362.7