Question
￡500 is invested for 2 years at 3% simple interest per year. Work out the total interest.
Answer
4.7
(368 Votes)
Cara
Master · Tutor for 5 years
Answer
£30
Explanation
This question requires understanding of how simple interest is calculated. The formula for calculating simple interest is: Principle (P) times the rate (r), times the time (t), which can be written as Interest (I) = P*r*t. The question has provided the values for these parameters:- The principal amount (P)= £500- The interest rate per year (r) = 3%- The time period (t) in years = 2.To get the interest rate in decimal form, divide the interest rate by 100.On plugging these values into the formula, it will yield the total interest earned after 2 years.