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| Math Central | Quandaries & Queries |
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Question from Gerry: Calculate the amount of interest received on £120.00 desposited in an account paying 3% simple interest for three years. |
With simply interest, the principal never changes. The original
deposit amount is what is used to calculate the interest.
Here's an example just like your question:
Q. What is the amount of interest received on £1 000 deposited in an
account paying 5% simple interest for seven years?
A. Each year, you get 5% of £1 000, so the total interest is 7 x 5% x
£1 000. Remember that 5% means 0.05 or (5/100). So this is 7 x 0.05
x £1 000 = £350.
Now you try it with your figures.
Stephen La Rocque.
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