6 An account pays 4% compound interest per year. Eric invests £1500 into the account for 2 years. How much interest will h

Question

6 An account pays
4% compound interest per year.
Eric invests £1500 into the account for 2 years.
How much interest will he earn?
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Gia Bảo 6 months 2021-08-22T05:45:37+00:00 1 Answers 1 views 0

Answers ( )

    0
    2021-08-22T05:46:59+00:00

    Answer: £122.4

    Step-by-step explanation:

    Given

    The rate of interest is 4%

    The principal invested is £1500

    the time period is 2 years

    Compound interest is given by

    C.I.=P(1+r\%)^t-P

    put values

    C.I.=1500(1+0.04)^2-1500\\C.I.=1500[1.04^2-1]\\C.I.=1500[1.0816-1]\\C.I.=1500\times 0.0816\\C.I.=122.4

    Therefore, interest earned is £122.4

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