Answer:
[tex]\£2,465[/tex]
Step-by-step explanation:
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
step 1
Find the final investment for the first two years
we have
[tex]t=2\ years\\ P=\£1,900\\ r=0.035\\n=1[/tex]
substitute in the formula above
[tex]A=\£1,900(1+\frac{0.035}{1})^{1*2}[/tex]
[tex]A=\£1,900(1.035)^{2}[/tex]
[tex]A=\£2,035.33[/tex]
step 2
Find the final investment for the next 4 years
we have
[tex]t=4\ years\\ P=\£2,035.33\\ r=0.049\\n=1[/tex]
substitute in the formula above
[tex]A=\£2,035.33(1+\frac{0.049}{1})^{1*4}[/tex]
[tex]A=\£2,035.33(1.049)^{4}[/tex]
[tex]A=\£2,464.55[/tex]
Round to the nearest pound
[tex]\£2,464.55=\£2,465[/tex]
