Question

======= Medal to best answer =======

Answer 1

Peter has £20,000 to invest in a saving account for 2 years

Answer 2

Peter wants to have as much money as possible in his account at the end of 2 years. Which bank account is best?

Answer 3

Just need a way to solve it BTW

Answer 4

@amistre64

Answer 5

Medal to best response on how to solve it (not the answer)

Answer 6

I don't know if i'm correct but I used the interest rate formula?

Answer 7

@tkhunny
I'm dumb

Answer 8

I am thinking i work out the percentage then add the next percentage on to next year
Since its called compund interest

Answer 9

Got £21,112 for the bonus saver account

Answer 10

Now to work out the next one

Answer 11

I was thinking about the compound interest formula on a previous question

Answer 12

205/2 = 102.5

Answer 13

Compound and Simple interest are identical over a period of exactly one year. If you do it carefully, you can go either way over short durations. However, Simple Interest formulas tend to calculate just interest, making your responsibility to keep track of the total.

Compound Interest formulas can track the total better.

20000 to start
20000*(1.04) grow at 4% the first year
20000*(1.04)*(1.015) grow at 4% the first year and 1½% the second year.

You do the other one and calculate the totals for the comparison.

Answer 14

Yep, thanks for the tip just worked it out though on my own. I got bonus saver as best

Answer 15

@tkhunny
I just noticed how slow your reply was

Answer 16

Bonus saver - £21,112
Fixed rate - £21,012.50

Answer 17

It's a laggy struggle.

Answer 18

Thanks

Answer 19

lol

Answer 20

I had trouble using openstudy on internet explorer