Simple Interest Calculation

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Questions and Answers

If £1200 is invested in an account earning 6% simple interest annually, what amount is earned in interest each year?

  • £72 (correct)
  • £96
  • £60
  • £84

Suppose £1200 is deposited into an account with a simple interest rate of 6% per annum. What will the total amount in the account be after 2 years?

  • £1344 (correct)
  • £1488
  • £1416
  • £1272

An account contains £1200 and earns simple interest at a rate of 6% per year. How many years would it take for the account to reach a total of £1416?

  • 2.5 years (correct)
  • 3 years
  • 2 years
  • 3.5 years

If £1200 accrues simple interest at an annual rate of 6%, what is the combined interest earned after 3 years?

<p>£216 (C)</p> Signup and view all the answers

If an account starts with £1200 and earns 6% simple interest each year, in how many years will the total interest earned equal the initial deposit?

<p>16 years (D)</p> Signup and view all the answers

An individual invests £1200 in an account with a simple interest rate of 6% per year. If they withdraw the interest earned each year, how much will they have withdrawn after 5 years?

<p>£360 (D)</p> Signup and view all the answers

After how many years will the simple interest earned on a £1200 investment at a 6% annual rate exceed £500?

<p>7 years (D)</p> Signup and view all the answers

If a £1200 investment yields £432 in simple interest, with an annual rate of 6%, for how many years was the money invested?

<p>6 years (A)</p> Signup and view all the answers

An account with £1200 earns simple interest. After one year, the balance is £1272. What annual interest rate does the account provide?

<p>6% (B)</p> Signup and view all the answers

£1200 is invested in a simple interest account. What interest rate is needed for the investment to double in 20 years?

<p>5% (D)</p> Signup and view all the answers

If £1200 grows to £1512 in 3 years with simple interest, what is the annual interest rate?

<p>9% (D)</p> Signup and view all the answers

An individual invests £1200 at a simple interest rate of 6% per year. If no withdrawals are made, after how many years will the investment plus accumulated interest total £1632?

<p>6 years (A)</p> Signup and view all the answers

What initial investment is needed in order to earn £90 in simple interest after one year, with an annual interest rate of 6%?

<p>£1500 (D)</p> Signup and view all the answers

If an account holds £1200 and gains simple interest, and after 4 years it contains £1488, what is the annual simple interest rate %?

<p>5.7% (C)</p> Signup and view all the answers

If £1200 is deposited into an account with a simple interest rate of 6%, how much total interest will have been earned once the principal reaches £1500?

<p>£300 (C)</p> Signup and view all the answers

If Bob invests £1200 at a simple interest rate of 6% per year and Mary invests £1000 at 8% per year, after how many years will they have earned the same amount of interest?

<p>10 years (C)</p> Signup and view all the answers

Consider Sally and Omar. Sally invests £1200 at 6% simple interest and Omar invests £1500 at 5% simple interest. After 5 years, what is the difference between their total amounts?

<p>Omar has £156 more than Sally (A)</p> Signup and view all the answers

If an account starts with £1200 and earns simple interest at 6% per annum, what would the balance be after 6 months?

<p>£1236 (D)</p> Signup and view all the answers

John has £1200 in an account earning 6% simple interest. Tim has £1000 in a different account. If, after 1 year, John and Tim have the same percentage increase in their accounts, what interest rate does Tim's account have?

<p>7.2% (B)</p> Signup and view all the answers

An account has £1200 and earns 6% simple interest annually. At the end of each year, half of the interest earned is withdrawn. What is the balance in the account at the end of the third year?

<p>£1308 (A)</p> Signup and view all the answers

Flashcards

What is simple interest?

A method of calculating interest where interest is earned only on the principal amount.

What is the principal amount?

The initial amount of money deposited or invested.

How much interest is added each year to £1200 at 6% simple interest?

6% of £1200 = £72.

What will the total amount be after two years with simple interest?

After two years, with £72 simple interest added each year, the total interest is £144. The total amount in the account will be £1200 + £144 = £1344.

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Study Notes

  • £1200 is deposited into an account.
  • The account earns simple interest at a rate of 6% per year.

Simple Interest Calculation - Year 1

  • The amount of money added to the account each year is calculated.
  • 6% of £1200 is £72

Account Balance After Two Years

  • The total amount in the account after two years is calculated.
  • After one year, the balance is £1200 + £72 = £1272
  • After two years, the balance is £1272 + £72 = £1344

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