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A bank promises to pay 3.5% pa compound interest on deposits of £7691 if saved for 4 years. How much will the savings be worth at the end of the period mentioned? Write your answer correct to 2 decimal places

Solution

Solution

Amount : 8825.6

Solution steps

Translate the problem into an equation:

A = 7691 (1 + \frac{0.035}{1})^{1 \cdot 4}

7691 (1 + \frac{0.035}{1})^{1 \cdot 4} = 8825.59939 \dots

Round to the nearest hundredth:

8825.6

Amount : 8825.6

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