James invests £200 for 1 year in a bank account.The account pays simple interest at a rate of 3% per year.Work out the total amount of money in the account at the end of the year.£..............................(2)2. Sami invested £400 for 2 years at 5% per year simple interest.Work out the total interest Sami gets.
Question
James invests £200 for 1 year in a bank account.The account pays simple interest at a rate of 3% per year.Work out the total amount of money in the account at the end of the year.£..............................(2)2. Sami invested £400 for 2 years at 5% per year simple interest.Work out the total interest Sami gets.
Solution
- To calculate the total amount of money in James' account at the end of the year, we first need to calculate the interest he earns.
The formula for simple interest is: Interest = Principal x Rate x Time
For James, the principal is £200, the rate is 3% (or 0.03 when expressed as a decimal), and the time is 1 year.
Interest = £200 x 0.03 x 1 = £6
So, James earns £6 in interest.
To find the total amount of money in the account, we add the interest to the principal:
Total amount = Principal + Interest = £200 + £6 = £206
- To calculate the total interest Sami gets, we use the same formula.
For Sami, the principal is £400, the rate is 5% (or 0.05 when expressed as a decimal), and the time is 2 years.
Interest = £400 x 0.05 x 2 = £40
So, Sami gets £40 in interest.
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