Charlie takes out a loan of £20,000. It gains compound interest at a rate of 4% per year and he pays it back after 3 years.
Copy and complete the expression below for the amount of money that Charlie must pay back.
£20,000 x (1 + 0.04)^3 = £22,024.32
The expression for the amount of money that Charlie must pay back can be calculated using compound interest formula:
Final amount = Principal amount * (1 + interest rate)^time period
In this case, the principal amount is £20,000, the interest rate is 4% (or 0.04), and the time period is 3 years. So, the expression would be:
Final amount = £20,000 * (1 + 0.04)^3