Yearly compound interest is given by the following formula:
[tex]A = P(1+r)^t[/tex]
A is the total amount after the time period elapses. P is the initial amount invested. r is the interest rate in decimal form, and t is the amount of years that elapse.
The interest rate is 1.5%. Divide by 100 to convert into a decimal:
[tex]1.5 \div 100 = 0.015[/tex]
We now have all of our values to plug into the equation:
[tex]P = 12,000, r = 0.015, t = 2[/tex]
[tex]12,000(1+0.015)^{2}[/tex]
[tex]12,000(1.015)^{2} = 12,362.7[/tex]
After 2 years, Mary will have 12,362.70 euros in her account.
To find the value of the investment, subtract the original amount from the new amount:
[tex]12,362.70 - 12,000 = 362.70[/tex]
The value of the investment is £362.70.
