Question

Dan invests £2500 into his bank account. He receives 5% per year simple interest. How much will Dan have after 2 years? Give your answer to the nearest penny where appropriate.

Answer 1

AMOUNT = £2,750.00

Dan will have £2,750 as a sum after 2 years.

Explanation:

Amounts invested by Dan= £2500.

Rate of interest per year = 5%

Time (Duration of investment) = 2 years.

Simple Interest (I) = PRT/100.

P = Principal (That's the invested sum) = £2500

Rate = %age of compensation= 5%

Time = Duration of investment = 2 years.

Simple Interest :

= (£2500 * 5% * 2years) / 100

= £25 * 5 * 2

= £250.

That's that's simple Interest for the amount invested after 2 years.

But the question seek to know how much AMOUNT Dan will get after two years.

AMOUNT is the addition of the principal and the interest for a said duration.

AMOUNT = PRINCIPAL + INTEREST

AMOUNT = £2500 + £ 250

AMOUNT = £2,750

Dan will have £2,750 as a sum after 2 years.

Answer 2

Explanation:

The formula for determining simple interest is expressed as

I = PRT/100

Where

I represents interest paid on the amount invested.

P represents the principal or amount invested.

R represents interest rate

T represents the duration of the investment in years.

From the information given,

P = £2500

R = 5%

T = 2 years

I = (2500 × 5 × 2)/100 = $250

Therefore, the amount that Dan will have after 2 years is

250 + 2500 = £2750