Question

Brian invests £4900 into his bank account.

He receives 1.5% per year compound interest.
How much will Brian have after 4 years?
Round your answer to 2 D.P

Answer 1

£ 5200.37

Explanation:

You can use the below formula to find the total amount of money which he will receive after n years when he invests in compound interest.

`A = P [ 1 + (r)/(100) ] ^(n)`

Here,

A ⇒ Amount

P ⇒ Money invested ⇒ £4900

r ⇒ Percentage ⇒ 1.5%

n ⇒ No. of years ⇒ 4 years

Let us solve now.

`A = P [ 1 + (r)/(100) ] ^(n)`

`A =4900[1+(1.5)/(100) ]^(4)`

`A =4900[1.015]^(4)`

`A=4900[1.0613]`

`A=5200.37`

Hope this helps you :-)

Answer 2

• £5200.68

Explanation:

Given:

• Investment P = £4900
• Interest rate r = 1.5% or r = 0.015
• Time t = 4 years
• Number of compounds per year n = 1

Find the future amount:

• 
  `F = P*(1+r/n)^(nt)\\`
• 
  `F = 4900*(1+0.015/1)^(1*4)=4900*1.015^4 = 5200.68`