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.
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.
To calculate the value of the investment after 2 years and 9 months, we need to divide the time period into years and months separately.
First, we convert 9 months into a fraction of a year. Since there are 12 months in a year, 9 months is equivalent to 9/12 = 3/4 of a year.
Next, we add the 2 years and 3/4 of a year to get the total time in years. This gives us 2 + 3/4 = 2.75 years.
We can then use the formula for simple interest:
Simple Interest = Principal (P) * Interest Rate (R) * Time (T)
In this case, the principal (P) is £2500 and the interest rate (R) is 3.55% or 0.0355 in decimal form. The time (T) is 2.75 years.
Now we can calculate the interest:
Interest = £2500 * 0.0355 * 2.75 = £244.37
To find the value of the investment when he takes it out, we add the interest to the principal:
Investment Value = Principal + Interest = £2500 + £244.37 = £2744.37
Therefore, the value of the investment when Cai takes it out is approximately £2744.37.