Question

James invested £2000 for three years in an Internet Savings Account.

He is paid 5.5% per annum compound interest.
Work out the total interest earned after three years

Answer 1

£2348.48

Explanation:

We can use the “slow method” for this, seeing it’s only 3 years.

£2000 * 105.5% = 2110 * 105.5% = 2226.05 * 105.5% = 2348.48

(105.5% = 1.055, by the way)

After the initial calculation, you can use Ans * 1.055 until you’ve hit the three years.