Simple interest

Simple interest refers to a percentage of the original amount based on a certain period (usually in years). What will happen if you invest R2 000 in a bank at a fantastic rate of 9% per annum for 3 years.

To determine the interest, you need to calculate 9% of R2 000 for 3 years. The R540 interest gained should then be added to the original amount of R2 000. Thus, after 3 years you will have an investment worth R2 540.

Watch this video to understand the formula and more examples.