Question

Shelby invests £14000 in a savings account. The account pays 2.5% compound interest per year.

Work out the value of her investment after 2 years.​

Answer 1

£14708.75

Explanation:

Always start with the original amount, in this case 14000.

Then, because it's an increase, add 2.5 to 100. You could also think of it as adding 2.5% to 100%, which is 102.5%. We then divide that by 100.

So far our calculation is 14000 x 1.025.

We now need to do this for the two days on. We can do this in 2 ways.

1. 14000 x 1.025 x 1.025

or.

2. 14000 x 1.025^2

They're both the same thing.

We then type that calculation into your calculator and you should get £14708.75

Hope that helped :)

Answer 2

70000

Explanation: