This question can be solved using an exponential equation. Exponential equations take the form ab^x. In interest problems, a represents the initial investment, b represents the yearly interest rate, and x is the number of years.
The exponential equation that models this situation is: 5000(1.04)^3. Next, simply evaluate this equation and you will get your answer!
5000x1.1249
5624.5
Your final answer is £5624.50
