Question

Beatrice invests $100 at 7% per year simple interest. i) Show that after 20 years, Beatrice has $240.

Answer 1

P(1+rY) (r=Interest in Decimal Form) (Y=Number of years investing)

Explanation:

The expression you want to use for simple interest is P(1 + rY), where r = the interest (in decimal, so 0.07) and Y = the number of years you are investing.

100(1+(0.07)(20))

This turns into

100(1+1.4)

100(2.4)

And with simple multiplication (100 x 2.4) you would receive 240 as an answer.

Hope that helps.