Question

Southern bank has 2 types of avcounts both accounts pay compound interest everyday saver account interest 2.4% per annum 1234 account interest3.4%per annum sue invests £2300 in the saver account bill invests £1800 in the 1234 account interest work ot how much sue and bill each get after 3 years

Answer 1

After 3 years, Sue will get £2471.70 and Bill will get £1993.28.

Explanation:

Amount at Compound Interest,
`A=P(1+(r)/(k) )^(nk)`

Since interest is compounded everyday, period, k=365.

Sue

Amount Invested, P=£2300

Interest Rate Per annum (Saver Account) = 2.4%=0.024

Period, k=365 days

Number of Years, n=3 years

`A=2300(1+(0.024)/(365) )^(365*3)\\=\£2471.70`

Bill

Amount Invested, P=£1800

Interest Rate Per annum (1234 Account ) = 3.4%=0.0034

Period, k=365 days

Number of Years, n=3 years

`A=1800(1+(0.034)/(365) )^(365*3)\\=\£1993.28`

After 3 years, Sue will get £2471.70 and Bill will get £1993.28.