Murray invests £575 in a bank account that pays
annual compound interest of 7,5%.
How much money will he have in the bank:
a) after 3 years?
b) after 6 years?
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Answer:
a) £714.32
b) £887.40
Step-by-step explanation:
a) A = P (1 + r/100)^n
= 575 × 107.5/100 × 107.5/100 × 107.5/100
= £714.40
b) A = P (1 + r/100)^n
= 575 × 107.5/100 × 107.5/100 × 107.5/100 ×
107.5/100 × 107.5/100 × 107.5/100
= £887.398
= £887.40 (approx)
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