Simple interest I think would just be work out the interest earned:
1500 x 6/100 or 1500 x 0.06
This is £90 interest per year.
For simple interest you just want to times that by 5 for the number of years: 5 x 90= £450
So add that interest to your original 1500 and you get a total of £1950.
More useful (and realistic) is compound interest. All this means, is that in the first year, you earn 6% as before, and add it on to the 1500. Then in the second year, you get 6% interest on both the initial amount of £1500, and on your £90 as well.
So it goes like this:
Year 1 : 1500 x 1.06 = £1590.00
Year 2 : 1590 x 1.06 = £1685.40
Year 3 : 1685 x 1.06 = £1786.52
Year 4 : 1787 x 1.06 = £1893.72
Year 5 : 1894 x 1.06 = £2007.34
So with compound interest, you will be slightly (or sometimes a lot) better off. This is how most bank accounts are calculated.
1500 x 6/100 or 1500 x 0.06
This is £90 interest per year.
For simple interest you just want to times that by 5 for the number of years: 5 x 90= £450
So add that interest to your original 1500 and you get a total of £1950.
More useful (and realistic) is compound interest. All this means, is that in the first year, you earn 6% as before, and add it on to the 1500. Then in the second year, you get 6% interest on both the initial amount of £1500, and on your £90 as well.
So it goes like this:
Year 1 : 1500 x 1.06 = £1590.00
Year 2 : 1590 x 1.06 = £1685.40
Year 3 : 1685 x 1.06 = £1786.52
Year 4 : 1787 x 1.06 = £1893.72
Year 5 : 1894 x 1.06 = £2007.34
So with compound interest, you will be slightly (or sometimes a lot) better off. This is how most bank accounts are calculated.
