Marco wants to invest his savings in a bank for 3 years he has £15000 to invest
Answers
Answer:wow that very great
Step-by-step explanation:
Marco should choose the bank which offer 2.5% interest compounded annually to get most interest over three years period.
Step-by-step explanation:
P=Rs 15000
One bank offer interest rate for three years
Amount for n years
A=
Where P=Principle
r=Rate of interest
n=Time (in years)
Using the formula
Amount received by Marco when one bank offer rate of interest 2.5%
When one bank offer rate of interest 2.5% then
C.I=Amount-P=16153.36-15000=Rs 1153.36
For other bank trust
S.I=
Where t=Time
Using the formula and substitute %
t=1 year
Amount=P+S.I=15000+570=15570
Now, P=15570
Amount received after 1 year then it becomes principle money for next year
r=3.8+1=4.8%
t=1 year
S.I=
Principle money for third year
P=A=15570+747.36=16317.36
r=4.8+1=5.8%
t= 1 year
The interest received in three years=Rs 903.06
Therefore, the bank which offer 2.5 % compound interest annually gives Marco more interest over three years.Therefore, Marco should choose the bank which offer 2.5% interest compounded annually.