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This problem is about calculating the future value of an investment using compound interest. The formula for compound interest is:

\[
A = P \left(1 + \frac{r}{100}\right)^t
\]

Where:
- \( A \) is the amount after time \( t \),
- \( P \) is the principal (initial investment),
- \( r \) is the annual interest rate (as a percentage),
- \( t \) is the time in years.

In this case:
- \( P = £1283 \),
- \( r = 7.4\% \),
- \( t = 5 \) years.

Let's calculate the investment's worth after 5 years:

\[
A = 1283 \left(1 + \frac{7.4}{100}\right)^5
\]
\[
A = 1283 \left(1.074\right)^5
\]
\[
A \approx 1283 \times 1.429857
\]
\[
A \approx 1834.37
\]

So, the investment will be worth approximately **£1834.37** after 5 years.

Do you want any more details or have any further questions?

Here are 5 related questions for further practice:
1. What would the investment be worth after 10 years at the same rate?
2. If the interest rate was reduced to 5%, what would be the value after 5 years?
3. How much interest would Tom earn after 5 years with the original rate?
4. If Tom invested £2000 at 7.4% for 5 years, what would the final value be?
5. What is the formula for continuous compound interest, and how would it change the result?

**Tip:** Compound interest grows faster over time, especially as the interest rate or time increases.

Tom invests £1283 at 7.4% per year. How much is the investment worth after 5 years?

Learn how to calculate the future value of an investment of £1283 at an interest rate of 7.4% compounded annually over 5 years. This problem demonstrates the use of the compound interest formula, suitable for students in Grades 9-12.

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