Cai invests £2500 in an account that pays 3.55% simple interest per year. He takes out his money after 2 years and 9 months. What is the value of the investment when he takes out his investment? Give your answer to the nearest penny.

Answer 1

The formula to calculate simple interest is:

Interest = Principal × Rate × Time

In this case, the principal is £2500, the rate is 3.55%, and the time is 2 years and 9 months.

First, convert the time in years:

9 months is 9/12 = 0.75 years.

So, the total time is 2 + 0.75 = 2.75 years.

Now, calculate the interest:

Interest = £2500 × 3.55% × 2.75 = £2500 × 0.0355 × 2.75 = £243.06

Finally, calculate the value of the investment by adding the interest to the principal:

Value of investment = Principal + Interest = £2500 + £243.06 = £2743.06

Therefore, the value of the investment when Cai takes out his money is approximately £2,743.06.