Question

Dan invests £11000 into a savings account. The bank gives 3.9% compound interest for the first 3 years and 4.5% thereafter. How much will Dan have after 7 years to the nearest pound?

Answer 1

The initial amount of the money is £11,000 and the interest is 3.9% per year for first 3 years and then 4.5% after that. If Dan invests it for 7 years, that means the interest would be 3 years of 3.9% and 4 years of 4.5%.
The calculation would be:

total money= initial amount * interestrate1 * interest 2
total money= £11000 *(100%+3.9%)^3*(100%+4.5%)^4
total money= £11000 *(103.9%)^3 * (104.5%)^4
total money= £11000 * 1.121622319 * 1.1925186
total money= £14,713.11