Question

Alya had her money in an account for 25 years at 4 percent interest. Bassam had his money in an account for 20 years at 5 percent interest. Seham had her money in an account for 5 years at 20 percent interest. If each of them originally deposited 500 AED in their accounts, calculate the amount of money each one of them has in her/ his account now?

a.         Alya    

b.         Bassam

c.         Seham

Answer 1

a) given, original amount deposited by alya = 500 AED

Alya had depostied 500 AED for 25 years at 4% interest.

to calculate the final amount, we can  apply the simple interest formula :

A = P(1+rt)

A is the final investment value or final value of money deposited.

P is the principal amount deposited.

t is the time period

r is the rate of interest divided by 100

therefore to calculate the amount of money alya has now after 25 years, applying the formula:

A = 500((1+(0.04x25)

A= 500 x 2

A = AED 1000

b.) Bassan had deposited 500 AED for 20 years at 5% interest.

calculating the amount bessan has now after 20 years :

A = P(1+rt)

A = 500((1+0.05x20))

A = 500x2

A = 1000 AED

c.) Seham deposited AED 500 for 5 years at 20% interest.

calculating amount Seham has now after 5 years :

A = P(1+rt)

A = 500((1+0.2x5))

A = 500x2

A = 1000 AED