To calculate the balance of the account after 1 year, we use the formula for compound interest:
A = P(1 + r)^n
Where:
- A is the final amount
- P is the principal amount (initial balance)
- r is the annual interest rate (in decimal)
- n is the number of years
Given:
- P = £6000
- r = 5% = 0.05
- n = 1 (for 1 year)
Plugging in the values:
A = 6000(1 + 0.05)^1
A = 6000(1.05)
A = £6300
So, the balance of the account after 1 year is £6300.
To calculate the balance after 2 years, we use the same formula:
A = 6000(1 + 0.05)^2
A = 6000(1.05)^2
A = 6000(1.1025)
A = £6615
So, the balance of the account after 2 years is £6615.
Answer:
one year - 6300 pounds
Two years - 6615 pounds
Step-by-step explanation:
after 1 year:
100%+5%=105%=1.05
6000*1.05=6300 pounds
After 2 years
6000*1.05^2=6615 pounds
