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£1400 is placed into an account. It gathers simple interest at a rate of 7% per year.
A) how much money is added to the account each year?
B) how much money will be in the account after two years?

Respuesta :

mathstudent55

Answer:

A. £98

B. £1596

Step-by-step explanation:

For simple interest, we use the formula:

I = Prt

where

I = interest earned

P = principal amount, the amount invested

r = annual interest rate written as a decimal

t = number of years

Here, we have

P = £1400

r = 7% = 0.07

A) t = 1 year

I = Prt

I = £1400 × 0.07 × 1

I = £98

The interest added each year is £98.

B) t = 2 years

I = Prt

I = £1400 × 0.07 × 2

I = £196

The interest earned in 2 years is £196.

We add the interest earned to the principal to find the total amount of money.

£1400 + £196 = £1596

After 2 years, the amount of money in the account is £1596.