an investor is considering investing £5000 over five years in a scheme which offers compound interest of 3.4% compounded annually. what is the total interest paid.
Total after 5 years will be
total= 5000(1+0.034)^5 =5909.80
Hence interest paid will be 909.80 Pounds
You might want to memorise the formula as
A = P(1+r)^t where P is principal , r is rate in decimal and t is time.
Hope this helps