Answered

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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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Sagot :

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

[tex]C.I.=P(1+r\%)^t-P[/tex]

put values

[tex]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[/tex]

Therefore, interest earned is £122.4

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