Question

10 of 10

© Colin invests £980 into his bank account. He receives 1.1% per year simple

interest. How much will Colin have after 7 years? Give your answer to the nearest

penny where appropriate.

Answer 1

Colin will have $1055.46 after 7 years.

Explanation:

This is a simple interest problem.

The simple interest formula is given by:

`E = P*I*t`

In which E are the earnings, P is the principal(the initial amount of money), I is the interest rate(yearly, as a decimal) and t is the time.

After t years, the total amount of money is:

`T = E + P`.

In this question:

`P = 980, I = 0.011, t = 7`

So

`E = P*I*t`

`E = 980*0.011*7`

`E = 75.46`

Total

`T = E + P = 980 + 75.46 = 1055.46`

Colin will have $1055.46 after 7 years.