Alex invests £4500 at a rate of 7.5% per year simple interest - OCR - GCSE Maths - Question 4 - 2023 - Paper 4

To calculate the value of the investment at the end of 4 years using simple interest, we can use the formula:

$A = P(1 + rt)$

where:

• $A$ is the total amount after time $t$,
• $P$ is the principal amount (£4500),
• $r$ is the rate of interest (7.5% per year or 0.075 as a decimal),
• $t$ is the time in years (4 years).

Substituting the values into the formula:

$A = 4500(1 + 0.075 \times 4)$

Calculating this:

1. Calculate the interest: $0.075 \times 4 = 0.3$.
2. Now calculate $A$:
   $A = 4500(1 + 0.3) = 4500 \times 1.3 = 5850.$

Thus, the value of the investment at the end of 4 years is £5850.