Question

Brian invests £6300 into his bank account.
He receives 4.9% per year compound interest.
How much will Brian have after 2 years?
Give your answer to the nearest penny where appropriate.

Answer 1

Given:

Principal amount =6300

Interest = 4.9% p.a. compounded

To Find:

The amount Brian has in his bank account after 2 years

Explanation:

Compound interest calculate interest based on the initial deposit as well as all the interest accumulated over the previous period.

Find the amount in his bank after 2 years:

$\text{Amount} = p(1 + \dfrac{r}{100})^n$

$\text{Amount} = 6300(1 + \dfrac{4.9}{100})^2$

$\text{Amount} = \£ 6932.53$

Answer: Brian will have £6932.53 in his bank account after 2 years.