Get an answer in 5 minutes

We'll notify as soon as your question has been answered.

Plus iconAsk a question to our educators
MATHS
Asked by Kayleigh

If £2000 is placed into a bank account that pays 3% compound interest per year, how much will be in the account after 5 years?

Hi Kayleigh, You would need to use the compound interest formula here, which is Final amount = initial amount x interest rate^years. -- The initial and final amounts are both in pounds -- The interest rate is a percentage change displayed as a decimal (ie. a multiplier). For instance, if there was a 7% increase, it would be x1.07 because the next amount is the original amount (the '1') plus the added 7% (the extra '0.07'). --The number of years is added as a power to the percentage change multiplier. It shows how many times the interest has been calculated and added, because each year there is a larger amount in the bank, so you get more interest as well! So, for this example, you would do: Final amount = £2000 x 1.03^5 Final amount = £2000 x 1.15927.... (leave it in the calculator) Final amount = £2318.548.... which rounds to £2318.55 Please message me for any clarification :) Hope that helps! :)

Bhargavi's profile picture
Verified
Bhargavi D
·

104 students helped

Similar Maths questions

Tutors on Scoodle who can help with Maths

Need help with GCSE Maths?

Getting expert help from a tutor is a great way to improve your Maths grades.

Badge showing the text 'New'Discover learning resources by tutors

Learn Maths with Video Lessons
GCSE Maths - Numbers
1hr 28m · 8 videos
Paja's profile picture
Paja Kruzikova
·

545 students helped

GCSE Maths - Numbers
Quadratic Inequalities
28m · 3 videos
Iqbal's profile picture
Iqbal Lokman
·

1.4k students helped

Quadratic Inequalities
GCSE Maths - Ratios
1hr 32m · 9 videos
Paja's profile picture
Paja Kruzikova
·

545 students helped

GCSE Maths - Ratios
GCSE Maths - Algebra A
56m · 6 videos
Paja's profile picture
Paja Kruzikova
·

545 students helped

GCSE Maths - Algebra A
GCSE Maths - Algebra B
1hr 14m · 7 videos
Paja's profile picture
Paja Kruzikova
·

545 students helped

GCSE Maths - Algebra B
GCSE Maths - Algebra C
1hr 27m · 9 videos
Paja's profile picture
Paja Kruzikova
·

545 students helped

GCSE Maths - Algebra C