Week 347 (31st May 2024)

Heather has been gifted £10,000 by a relative. She decides to spend £3,000 on a holiday and then invest the remaining money.   

Heather invests £7,000 for 2 years in an account paying compound interest.  

In the first year, the rate of interest is 3%.   

In the second year, the rate of interest is 1.5%. 

Work out the value of Heather’s investment at the end of 2 years. 


Firstly we find out the value of her investment after the first year.

7000 x 1.03 = 7210

And then after the second year:

7210 x 1.015 = £7318.15