Question

Dan invests £1300 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

Given parameters:

Principal = £1300

Interest rate = 5%

Duration = 2yrs

Unknown:

Total amount of Dan's principal = ?

To solve this problem, we apply the equation below:

Total investment worth = Principal + interest

Interest =
`(PRT)/(100)`

where P is the principal

R is the rate

T is the time

Now, input the parameters;

Total investment worth = £1300 + £
`(1300 x 5 x 2)/(100)`

= £1300 + £130

= £1430

The amount after two years is £1430