Question

Brian invests £8300 into his bank account. He receives 1.4% per year compound interest. How much will Brian have after 7 years? Give your answer to the nearest penny where appropriate.

Answer 1

To calculate compound interest, you can use the formula A = P(1+r/n)^nt. In this case, Brian will have approximately £9145.91 in his bank account after 7 years.

Step-by-step explanation:

To calculate compound interest, you can use the formula A = P(1+r/n)nt, where:

• A is the amount of money accumulated after time t
• P is the principal amount (initial investment)
• r is the annual interest rate (in decimal form)
• n is the number of times that interest is compounded per year
• t is the number of years

In this case, Brian invests £8300 with an annual interest rate of 1.4%. The money is compounded annually for 7 years. We can plug these values into the formula:
A = 8300(1+0.014/1)1*7
Simplifying this, A = 8300(1.014)7
Using a calculator, A ≈ £9145.91. Therefore, after 7 years, Brian will have approximately £9145.91 in his bank account.