Question

Claire invests £200,000 in a savings account for 4 years. The account pays compound interest rate at 1.6% per annum. Calculate the total amount of interest Claire will get at the end of 4 years

Answer 1

£13,110.49

Explanation:

Answer 2

(A) = P( 1 + r/n) ^nt

P(Principal) = £200 000

r(interest rate) = 1.6% = 0.016

The total amount been saved after 4 years is calculated as:

A = P( 1 + r/n) ^ nt

A = £200,000( 1 + 0.016/1)¹× ⁴

A = £200,000(1.016)⁴

A = £213,110.48991

A = £ 213,110.49

Claire will get approximately £ 213,110.49 within 4 years.