Question

Colin invests £2900 into his bank account.

Answer 1

Answer:

£3263.98 (nearest penny)

Step-by-step explanation:

Compound interest formula

$\sf A=P(1+\frac{r}{n})^{nt}$

where:

• A = final amount
• P = principal
• r = interest rate (in decimal form)
• n = number of times interest applied per time period
• t = number of time periods elapsed

Given:

• P = £2900
• r = 3% = 0.03
• n = 1
• t = 4

Substituting given values into the formula and solving for A:

$\implies \sf A=2900(1+\frac{0.03}{1})^{1 \times 4}$

$\implies \sf A=2900(1.03)^{4}$

$\implies \sf A=3263.975549$

Therefore, Colin will have £3263.98 after 4 years (to the nearest penny).

Answer 2

Answer:

$3264

Explanation:

$\sf compound \ interest : P(1+\frac{r}{100} )^n$  
"P" is principal, "r" is rate of interest, "n" is time (years)

Here given:

• principal: £2900

• rate of interest: 3%

• time: 4 years

After 4 years amount:

$\rightarrow \sf 2900(1+\frac{3}{100})^4$

$\rightarrow \sf 2900(1.03)^4$

$\rightarrow \sf 3263.9755$

$\rightarrow \sf 3264$  (rounded to nearest whole number)