Answer:
3691 pounds
Step-by-step explanation:
Given: Colin invests £2350 into a savings account. The bank gives 4.2% compound interest for the first 4 years and 4.9% thereafter
To find: Amount that Colin will have after 10 years
Solution:
Let P, r, n denotes principal, rate of interest and time period
For the first 4 years:
[tex]P=\£\,2350\,,\,r=4.2\%\,,\,n=4[/tex]
Total amount after 4 years = [tex]P\left ( 1+\frac{r}{100} \right )^n=2350\left ( 1+\frac{4.2}{100} \right )^4=\£ 2770.38[/tex]
For the next 6 years:
[tex]P=\£\,2770.38\,,\,r=4.9\%\,,\,n=6[/tex]
Total amount after 6 years = [tex]P\left ( 1+\frac{r}{100} \right )^n=2770.38\left ( 1+\frac{4.9}{100} \right )^6=3691.41\approx \£\,3691[/tex]
