https://file.aiquickdraw.com/mathbot/file/17254461929158y31frzd.jpg

Let's analyze the problem presented in the image. The text states:

- **Principal Amount (P):** £1800
- **Simple Interest Rate (R):** 3% per year

### a) How much money is added to the account each year?

To calculate the simple interest added each year, we use the formula:

\[
\text{Interest per year} = \frac{P \times R \times T}{100}
\]

For one year (T = 1):

\[
\text{Interest per year} = \frac{1800 \times 3 \times 1}{100} = \frac{5400}{100} = £54
\]

So, £54 is added to the account each year.

### b) How much money will be in the account after two years?

The total amount in the account after two years can be calculated by adding the interest earned over two years to the principal amount.

\[
\text{Total Interest for 2 years} = 54 \times 2 = £108
\]

\[
\text{Total Amount after 2 years} = P + \text{Total Interest} = 1800 + 108 = £1908
\]

So, the account will have £1908 after two years.

Would you like any further details or have any questions?

Here are some related questions:

1. What would the interest be after three years?
2. How does compound interest differ from simple interest?
3. If the interest rate increased to 5%, how much would be added each year?
4. How would the total amount change after two years if the interest were compounded annually?
5. What would happen to the amount if you withdrew £100 each year?

**Tip:** Always check if the interest is simple or compound, as this significantly affects the total amount over time.

£1800 is put into an account. It gathers simple interest at a rate of 3% 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?

Give your answers in pounds (£).

Learn how to calculate the simple interest on £1800 at a rate of 3% per year. This guide covers how much money is added each year and the total amount in the account after two years. Suitable for students in Grades 6-8.

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