Question

Jordan invests £16200 into his bank account.
He receives 2.5% per year simple interest.
How much will Jordan have after 5 years?
Give your answer to the nearest penny where appropriate.

Answer 1

Principal(P) = £16200

Rate of interest(R) = 2.5%

Time (t) = 5 years

$amount(a) =p (1 + \frac{tr}{100})$

$a = 16200(1 + \frac{5 \times 2.5}{100} )$

$a = 16200(1 + \frac{12.5}{100})$

$a = 16200( \frac{100}{100} + \frac{12.5}{100} )$

$a = 16200( \frac{112.5}{100})$

$a = 162(112.5)$

$a = 18225$

We know that, 1 pound = 100 pence

So, 18225 pounds = 18225 * 100 = 1822500

Therefore money with Jordan after 5 years will be £1822500 pence.