Question

£100 is deposited in a bank paying 2.25% simple interest per annum. How much interest will have been paid after 5 years

Answer 1

£11.25

Explanation:

I = P * R * T

Where,

I = simple interest

P = principal = £100

R = interest rate = 2.25%

T = Time = 5 years

I = P * R * T

= 100 * 2.25% * 5

= 100 * 2.25/100 * 5

= (100 * 2.25 * 5) / 100

= 1,125/100

= 11.25

I = £11.25