Question

Anna invests £400 in a bank account paying 3% compound interest per annum work out how much is her account after 5 years.

Answer 1

Step-by-step explanation:

With compound interest, the interest that you earn increases with the increase in your investment (monthly/quarterly/semi-annual/or annual investment plus the interest that you are earning on this investment). This calculator will help you calculate the worth of your investment after a set number of monthly investments or even a single, initial investment, based on the interest accrued on the invested amount.

Answer 2

Answer:

Compound interest annually = £63.6 (approx)

Step-by-step explanation:

Given :

Principal = £400

Rate = 3% per annum

Time = 5 years

To find :

Compound interest annually

Taken :

To find the compound interest annually us this formula -:

$\boxed{\sf{C.I.=\bigg[P{\bigg(1+\dfrac{r}{100}\bigg)}^{n}\bigg]-400}}$

Where,

C.I. = Compound interest

P = Principal

r = Rate

n = Times per interest applied per time period

So , n = 5

Solution :

$:\implies\rm{C.I.=\bigg[400{\bigg(1+\cancel{\dfrac{3}{100}}\bigg)}^{5}\bigg]-400}$

$:\implies\rm{C.I.=\bigg[400{\bigg(1+0.03\bigg)}^{5}\bigg]-400}$

$:\implies\rm{C.I.=\bigg[400{\bigg(1.03\bigg)}^{5}\bigg]-400}$

$:\implies\rm{C.I.=\bigg[400\bigg(1.03\times1.03\times1.03\times1.03\times1.03\bigg)\bigg]-400}$

$:\implies\rm{C.I.=\bigg[400\times1.159(appox)\bigg]-400}$

$:\implies\rm{C.I.=463.6(approx)-400}$

$:\implies\rm{C.I.=63.6\:euro(approx)}$

So , the compound interest annually is £63.6 (approx) .