Question: Alicia puts £2525 into an bank account.
The account pays 3.5% simple interest each year.
Work out how much interest Alicia will get after 16 years.
£
1. **State the problem:**
Alicia deposits £2525 into a bank account that pays 3.5% simple interest per year. We need to find the total interest earned after 16 years.
2. **Formula for simple interest:**
$$I = P \times r \times t$$
where:
- $I$ is the interest earned,
- $P$ is the principal amount (initial deposit),
- $r$ is the annual interest rate (as a decimal),
- $t$ is the time in years.
3. **Convert the interest rate to decimal:**
$$r = \frac{3.5}{100} = 0.035$$
4. **Substitute the values into the formula:**
$$I = 2525 \times 0.035 \times 16$$
5. **Calculate the interest:**
$$I = 2525 \times 0.035 = 88.375$$
$$I = 88.375 \times 16 = 1414$$
6. **Final answer:**
Alicia will get £1414 in interest after 16 years.