Question

If £2000 is placed into a bank account that pays 3% compound interest per year,

Answer 1

Answer:

£2,121.80

Step-by-step explanation:

To solve this problem, we can use the compound interest formula:

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

P = initial balance

r = interest rate (decimal)

n = number of times compounded annually

t = time

First, change 3% into a decimal:

3% -> $\frac{3}{100}$ -> 0.03

Now, plug in the values:

$A=2,000(1+\frac{0.03}{1})^{1(2)}$

$A=2,121.80$

Your answer is £2,121.80