Question

Pippa's bank account pays 2.5% compound interest per annum and her bank

balance is £3200. After 3 years, how much will Pippa's bank balance be?

Answer 1

£3446.05

Explanation:

the interest for the first year

=£3200×2.5%

=£3200×2.5/100

=£80

the balance

=£3200+£80

=£3280

the interest for the second year

=£3280×2.5%

=£3280×2.5/100

=£82

the balance

=£3280+£82

=£3362

the interest for the third year

=£3362×2.5%

=£3362×2.5/100

=£84.05

the balance

=£3362+£84.05

=£3446.05