Question

Dan invests £8000 into his bank account.
He receives 2% per year compound interest.
How much will Dan have after 3 years?
Give your answer to the nearest penny where appropriate.

Answer 1

Step-by-step explanation:

Problem

You deposit some money into a bank account paying 2% simple interest per 6 months. You received $15 in interest after 9 months. How much the deposit (principal) was?

Result

The principal was $500.

Explanation

STEP 1: Convert interest rate of 2% per 6 months into rate per year.

rate per year = rate per 6 month⋅2=2%⋅2=4%

STEP 2: Convert 9 months into years.

9 months =912 years=0.75 years

STEP 3: Find principal by using the formula I=P⋅i⋅t, where I is interest, P is total principal, i is rate of interest per year, and t is total time in years.

In this example I = $15, i = 4% and t = 0.75 years, so

IPPP=P⋅i⋅t=Ii⋅t=150.04⋅0.75=500

Answer 2

Answer:

£8323.2

Given:

principal amount (P) = 8000

rate of interest (r) = 2%

time period (t) = 3 years

To Find:

Total amount after 3 years.

Step-by-step explanation:

we know,

amount is given by,

amount =  $P(1 + \frac{r}{t})^{2}$

amount = $8000(1+\frac{2}{100}) ^{2}$

amount = $8000(\frac{102}{100} )^{2}$

amount = $8000 (\frac{10404}{10000} )$

amount = 8323.2

Hence, after 3 years Dan will have £8323.2

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