Work out the balance for £1500 invested for 2 years at 3.7% per annum

Given:

Principal = 1,500

term = 2 years

interest rate = 3.7% per annum

Simple Interest = Principal * interest rate * term

S. I = 1,500 * 0.037 * 2

S. I = 111

Total value = 1,500 + 111 = 1,611

Compound interest

A = P (1+r/n) ^nt

where n is the number of times interest is compounded. Assuming interest is only compounded once.

A = 1,500 (1+0.037/1) ^1*2

A = 1,500 (1.037) ²

A = 1,500 (1.075369)

A = 1,613.0535