Question

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

Answer 1

Answer: total amount of interest = £13110.49

Explanation:

given that the

Principal P = £200,000

Time t = 4 years.

Rate R = 1.6%

Amount = P( 1 + R% )^t

Amount = 200000( 1 + 1.6%)^4

Amount = 200000 (1.016)^4

Amount = 200000 × 1.06555245

Amount = £213110.49

The total amount of interest = amount - principal

Total amount of interest = 213110.49 - 200000

The total amount of interest = £13110.49

Therefore, Claire will get a total amount of interest of £13110.49 at the end of four years