On the 1st of january 2014, carol invested some money in a bank account. the account pays 2.5% compound interest per year. on the 1st of january 2015, carol withdrew £1000 from the account. on the 1st of january 2016, she had £23 517.60 in the account. work out how much carol originally invested in the account?

The compound interest paid by the account is applied to the account

balance.

Reasons:

The compound interest paid by the account per year = 2.5%

Amount carol withdrew from the account on 1st of January 2015 = £1,000

Amount she had on the 1st of January 2015 = £23,517.60

Therefore, we have;

Which gives;

Amount in the account on the of January is

The principal from January 2015 = 1.025·P

After withdrawing 1,000, we get;

The principal = 1.025·P - 1000

The amount in the account in 2016 is given as follow;

£23,517.60 = (1.025·P - 1000)×(1.025)

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