Alex invest £4000 for 7 years his investment pays compound interest of x% annum. At the end of the years alexs investment is worth £5263.73. Work out x
Answers
Answer:
Answer: x=4% i.e.
Rate of interest = 4% per annum.
Step-by-step explanation:
Since we have given that
Amount Alex invested = £4000
Number of years = 7
Rate of interest = x%
Amount she received at the end of 7 years = £5263.73
We will use " Compound Interest " formula :
\begin{lgathered}A=P(1+\frac{r}{100})^n\\\\5263.73=4000(1+\frac{x}{100})^7\\\\\frac{5263.73}{4000}=(1+\frac{r}{100})^7\\\\\frac{526373}{400000}=(1+\frac{r}{100})^7\\\\1.3159325=(1+\frac{r}{100})^7\\\\(1.3159325)^{\frac{1}{7}}=1+\frac{r}{100}\\\\1.04=1+\frac{r}{100}\\\\1.04-1=\frac{r}{100}\\\\0.04=\frac{r}{100}\\\\4=r\end{lgathered}
A=P(1+
100
r
)
n
5263.73=4000(1+
100
x
)
7
4000
5263.73
=(1+
100
r
)
7
400000
526373
=(1+
100
r
)
7
1.3159325=(1+
100
r
)
7
(1.3159325)
7
1
=1+
100
r
1.04=1+
100
r
1.04−1=
100
r
0.04=
100
r
4=r
Hence, x=4% i.e.
Rate of interest = 4% per annum.
Answer:
4%
Step-by-step explanation: