Ikram invests £7000 in a savings account paying compound interest for 2 years.
In the first year, the rate of interest is x%.
At the end of the first year the value of Ikram's investment is £7273
In the second year, the rate of interest is x/3 %
What is the value of Ikram's investment at the end of the 2 years?
Answers
Given : Ikram invests £7000 in a savings account paying compound interest for 2 years.
In the first year, the rate of interest is x%.
At the end of the first year the value of Ikram's investment is £7273
In the second year, the rate of interest is x/3 %
To Find : What is the value of Ikram's investment at the end of the 2 years
Solution:
At the end of the first year the value of Ikram's investment is £7273
P = 7000
R = x % per annum
n = 1
A = 7273
A = P(1 + R/100)ⁿ
=> 7273 = 7000(1 + x/100)¹
=> 273 = 70x
=> x = 273/70
second year, the rate of interest is x/3 %
= 91/70 %
P = 7273
R = 91/70 %
n = 1
A = ?
A = 7273 (1 + 91/7000)¹
=> A = 7,367.55
value of Ikram's investment at the end of the 2 years = £ 7,367.55
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