Question

Jenny invests £8500 for 3 years in a savings account. She gets 2.3% per year simple interest. (this is where you calculate the profit for ONE year and just add it on... NOT compound interest) How much money will Jenny have in her savings account at the end of 3 years?

Answer 1

£9095

Explanation:

Given data

P=£8500

T= 3 years

R= 2.3%

The compound interest formula is

A= P(1+r)^t

substitute

A=8500(1+0.023)^3

A=8500(1.023)^3

A=8500*1.07

A=£9095

Hence the savings after 3 years is £9095