Question: Calculate the amount of simple interest earned.
Adam invests £3105 into an account that pays 1% simple interest per annum.
Work out how much interest Adam will get after 20 years.
1. **State the problem:**
We need to calculate the simple interest earned on an investment of $3105$ at an interest rate of $1\%$ per annum over $20$ years.
2. **Formula for simple interest:**
$$\text{Simple Interest} = P \times r \times t$$
where:
- $P$ is the principal amount (initial investment),
- $r$ is the annual interest rate (in decimal),
- $t$ is the time in years.
3. **Convert the interest rate to decimal:**
$$r = 1\% = \frac{1}{100} = 0.01$$
4. **Substitute the values into the formula:**
$$\text{Simple Interest} = 3105 \times 0.01 \times 20$$
5. **Calculate the interest:**
$$\text{Simple Interest} = 3105 \times 0.2 = 621$$
6. **Interpretation:**
Adam will earn $621$ in simple interest after $20$ years.