Question

Toni invests money into an account which pays a fixed rate of compound interest each year. The total value, £V, of her investment after t years is given by the formula:
V = 1350 x 1.04^t
Answer questions a & b

a- How much money did Toni invest in pounds
b- What rate of compound interest is paid each year

Answer 1

Answer:

Toni invested in pounds= $1350

rate of compound interest=4%

Step-by-step explanation:

Toni invests money into an account which pays a fixed rate of compound interest each year. The total value, £V, of her investment after t years is given by the formula:  

$V = 1350(1.04)^t$

Given equation is in the form of $A=P(1+r)^t$

where P is the amount invested

'r' is the rate of interest

t is the time taken

$V = 1350(1.04)^t$

P= 1350 is the initial amount invested

1+r= 1.04  (subtract 1 from both sides)

$r=0.04$ multiply it by 100 to get percentage

r= 4%

Answer 2

Ok, this is a simple compound interest problem.
For A) your answer is 1350. The initial investment, P, is represented by a whole number.
For B) The compound interest is paid at 4%. Look at 1.04. Remember the formula, and subtract the 1 to find the interest rate