Answer:
Results are below
Step-by-step explanation:
Giving the following information:
Initial investment (PV)= £3,850
Number of periods (n)= 6 years
Interst rate (i)= 1.3% = 0.013
First, we will calculate the future value (FV), by using the following formula:
FV= PV*(1+i)^n
FV= 3,850*(1.013^6)
FV= £4,160.23
Now, by difference, the interest earned:
Interest earned= 4,160.23 - 3,850= £310.23
