Question

Tom invested £1000 for 2 years with Bettabank.

He got 2.5% simple interest each year.
Jay invested £1000 for 2 years with Moneyplus.
She got a total of £60 interest for the 2 years.
Show that Jay got the better investment.

Answer 1

Since Tom got only £50 while Jay got £60 for th same amount invested in the same time, Jay got the better investment.

Explanation:

In order to show that Jay got a better investment we first need to calculate how much Tom earnt in simple interest during those two years. In order to do that we must apply the correct formula shown below:

M = c*r*t

Where M is the total of interest, c is the amount invested, r is the rate of interest and t is the time elapsed. Thefore Tom got:

M = 1000*0.025*2

M = £50

Since Tom got only £50 while Jay got £60 for th same amount invested in the same time, Jay got the better investment.