Question

Colin invests £980 into his bank account. He receives 0.3% per year simple interest. How much will Colin have after 7 years? Give your answer to the nearest penny where appropriate

Answer 1

Given:

Colin invests into his bank account = £ 980

The rate of simple interest = 0.3%

Time period = 7 years

To find:

The amount Colin will get after 7 years

Solution:

The formula of simple interest is :

• Simple Interest, S.I. = $\frac{PRT}{100}$

• Amount, A = P + S.I.

Using the above two formulas, we get

A = P + $\frac{PRT}{100}$

substituting the values

⇒ A = 980 + $[\frac{980\:*\:0.3\:*7}{100} ]$

⇒ A = 980 + $[\frac{2058}{100} ]$

⇒ A = 980 + 20.58

⇒ A = £ 1000.58

we will take the nearest penny where appropriate £

⇒ A ≈ £ 1001

Thus, Colin will have £ 1001 after 7 years.

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