What is the compound interest on a sum of £2500 at a rate of 6% per annum for 3 years?

What is the  compound interest on a sum of £2500 at a rate of 6% per annum for 3 years?

Well, first you divide the interest rate by 100 and you get .06, then add 1 to it

which becomes 1.06. That's the interest for 1 Pound for 1 year.

But you want the compound interest for 3 years, so we have,

1.06^3 X 2,500P=1.191016 X2,500P=2,977.54 Pounds in 3 years.