Question

Harry invested £6000 in savings account. The account pays 3.4% compound interest per year. Work out the value of his investment after three years.

Answer 1

Answer:

£6633.04

Step-by-step explanation:

the calculation is the original price times by the rate which i believe to be 1.034 to the power of years.

so, it would be £6000 x 1.034 to the power of three.

so, i believe the answer to be £6633.04 but if this is incorrect, i apologise.

Answer 2

Solution:

A = P[1 + (r/n)]^(nt)

A = final amount

P = initial principal balance

r = interest rate

n = number of times interest applied per time period

t = number of time periods elapsed

A = 6000 [ 1 + {3.4 / (3*100)}]^(3*3)

A = 6000 [ 1 + {0.0113}]^(9)

A= 6000 [ 1.0113 ]^(9)

A = 6000 [ 1.1064 ]

A = £6638.4

The value is approximate value.

What is Compound Interest (CI) ?

Compound Interest is all about adding interest to principal amount of loan , deposit .