Question

Dan Invests £2500 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.

Please help me give me the answer:
Explanation:

Answer 1

Sure, I'd be happy to help you with that!

To calculate Dan's earnings with simple interest, we can use the following formula:

I = P * r * t

where:

I = interest earned

P = principal amount (initial investment)

r = interest rate (as a decimal)

t = time period (in years)

We know that Dan invests £2500 and receives 5% simple interest per year, so:

P = £2500

r = 0.05

t = 2 years

Plugging these values into the formula, we get:

I = £2500 * 0.05 * 2

I = £250

This means that Dan will earn £250 in interest over the 2-year period.

To calculate Dan's total earnings, we simply add the interest earned to the initial investment:

Total earnings = £2500 + £250

Total earnings = £2750

Therefore, Dan will have £2750 in his bank account after 2 years.