Question

Dan invests £800 into his bank account.

He receives 5% per year compound interest.
How much will Dan have after 4 years?
Give your answer to the nearest penny where appropriate.

Answer 1

£972.41

Explanation:

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

A = Amount after n years = ?

P = Principal amount = £800

r = interest rate = 5%

n = time for which the money was invested = 4 years

∴ A = 800 (1 + 5/100)⁴

= £972.41

Hope this helps!