Question

Colin invests £4800 into his bank account.

He receives 3% per year compound interest.
How much will Colin have after 7 years?
Give your answer to the nearest penny where appropriate.

Answer 1

$5903.39

Explanation:

This can be solve using compound interest formula. The formula is:

`F=P(1+r)^t`

Where

F is the future amount (what we are looking for)

P is the present amount (which is 4800)

r is the rate of compound interest per year, in decimal (3% per year, 3/100 = 0.03)

t is the time in years ( t = 7)

Now we substitute these values into the formula and find F:

`F=P(1+r)^t\\F=4800(1+0.03)^7\\F=4800(1.03)^7\\F=5903.39`

So, Colin would have $5903.39 after 7 years, in his account.