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Paul leaves £4000 in the bank for two years. It earns compound interest of 5% per year. Calculate the totals amount Paul has in the bank at the end of the two years

Respuesta :

samuelonum1

Answer:

£4410

Step-by-step explanation:

Step one:

given data

Principal P= £4000

Rate= 5%= 0.05

time t= 2 years

Final amount A= ??

Required

The final amount

Step two:

The expression for the final amount of compound interest is

[tex]A= P(1+r)^t\\\\A=4000(1+0.05)^2\\\\A=4000(1.05)^2\\\\A=4000*1.1025[/tex]

A=£4410

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