contestada


Katy invests £200 000 in a savings account for 4 years. The account pays compound interest
at a rate of 1.5 % per annum.
Calculate the total amount of interest Katy will get at the end of 4 years

Respuesta :

madethisfortwitch1

Answer:

212272.71

Step-by-step explanation:

we have the following equation (for interesting that compound yearly)

PV(1+i)^n

200000(1+.015)^4

212272.71

vijayhalder031

The total amount of interest Katy will get at the end of 4 years is £12,272.71

Compound interest

  • Compound interest is the addition of interest to the principal sum of a loan or deposit, or in other words, interest on principal plus interest
  • Compound interest refers to the phenomenon whereby the interest associated with a bank account, loan, or investment increases exponentially—rather than linearly—over time.
  • Compound interest (or compounding interest) is the interest on a loan or deposit calculated based on both the initial principal and the accumulated interest from previous periods

How to solve this problem?

The steps are as follow:

  • Given:

p = £200 000

r = 1.5%

n = 4 years

  • Formula to find Amount (A) after 4 years will as follow:

A = p(1+r/100)ⁿ

A = 200000(1+1.5/100)⁴

A = 212,272.71 £

  • The compound interest is given by:

C.I. = A - p

C.I. = 212,272.71 - 200,000

C.I. = £12,272.71

So the  total amount of interest Katy will get at the end of 4 years is £12,272.71

Learn more about Compound interest here:

https://brainly.com/question/24924853

#SPJ2