Answer:
[tex]A=\£12.362.70[/tex]
Step-by-step explanation:
The complete question is
Mary invests £12000 in a saving account. The account pays 1.5% compound interest per year. Work out the value of her investment after 2 years.
we know that
The compound interest formula is equal to
[tex]A=P(1+\frac{r}{n})^{nt}[/tex]
where
A is the Final Investment Value
P is the Principal amount of money to be invested
r is the rate of interest in decimal
t is Number of Time Periods
n is the number of times interest is compounded per year
in this problem we have
[tex]t=2\ years\\ P=\£12,000\\ r=1.5\%=1.5/100=0.015\\n=1[/tex]
substitute in the formula above
[tex]A=12,000(1+\frac{0.015}{1})^{1*2}[/tex]
[tex]A=12,000(1.015)^{2}[/tex]
[tex]A=\£12.362.70[/tex]
