Katy invests £200000 in a savings account for 4 years - Edexcel - GCSE Maths - Question 3 - 2019 - Paper 3

To calculate the total amount in the savings account after 4 years with compound interest, we can use the formula:

$A = P(1 + r)^n$

where:

• $A$ is the total amount after time $n$,
• $P$ is the principal amount (£200,000),
• $r$ is the annual interest rate (1.5% or 0.015), and
• $n$ is the number of years (4).

Substituting the values:

$A = 200000(1 + 0.015)^4$ $A = 200000(1.015)^4$

Calculating $(1.015)^4$:

$(1.015)^4 \approx 1.061364$

Now, substituting this value back:

$A \approx 200000 \times 1.061364 \approx 212272.72$