Question

Dan invests £18790 into his bank account. He receives 4.9% per year simple interest. How much will Dan have after 3 years? Give your answer to the nearest penny where appropriate.

Answer 1

Using the simple interest formula, Dan's investment of £18,790 at 4.9% interest for 3 years will result in a total amount of £21560.77 when rounded to the nearest penny.

Step-by-step explanation:

The subject in question is calculating the future value of an investment using simple interest. To find out how much Dan will have after 3 years, the formula for simple interest can be applied: total amount = principal + (principal × interest rate × time).

For Dan's investment, the principal is £18,790, the interest rate is 4.9% (or 0.049 as a decimal), and the time is 3 years. Calculating the interest:

• £18,790 × 0.049 × 3 = £2770.77

Then adding the interest to the principal gives us:

• £18,790 + £2770.77 = £21560.77

Therefore, Dan will have £21560.77 after 3 years, rounded to the nearest penny.