Answer:
The total increase over the 2 years=£1,300.43
Step-by-step explanation:
a). Express the total amount after the first year as shown;
A=P(1+r)^n
A=total amount earned in a year
P=initial amount invested
r=annual interest rate
n=number of years
In our case;
P=£14000
r=5.9%=5.9/100=0.059
n=1
A=14,000(1+0.059)^1
A=14,000(1.059)
A=£14,826
The total amount in the second year
A=14,826(1+0.032)^1
A=£15,300.432
Increase=Amount after 2 years-Initial amount
Increase=(15,300.432-14,000)
Increase=1,300.43
The total increase over the 2 years=£1,300.43
