Stephan places £950 in his bank account which pays 1.6% simple interest per year.

A) How much interest will he earn each year?

B) How much will he have in his account after 1 year?

A. He will earn £15.2 each year

B. After one year he will have £965.2 in his account

Step-by-step explanation:

Applying the simple interest formula

A = P (1 + rt)

A = final amount

P = initial principal balance

r = annual interest rate

t = time (in years

Given data

Principal p = £950

Rate r = 1.6% = 1.6/100 = 0.016

Time t = 1 year

Substituting in our simple interest formula we have

A = 950 (1+0.016*1)

A = 950 (1+0.016)

A = 950 (1.016)

A = £965.2

Interest = final amount - principal

= 965.2-950

= £15.2