Simple interest over a fraction of a year

If money is not left in a bank account for a whole year then only a fraction of the interest gets paid.

Find the interest that Damon earns on \(\pounds40\) if he keeps it in the bank, paying \(8.5\%\) interest per annum, for six months.

Interest for one year \( = 8.5\%\,of\,\pounds40\)

\(= \frac{{8.5}}{{100}} \times 40\)

\(= \pounds3.40\)

Interest for six months = \(\frac{1}{2}\,of\,\pounds3.40\)

\(= \pounds1.70\)

New balance:

\(= 40 + 1.70\)

\(= \pounds41.70\)

Damon will earn \(\pounds1.70\) in interest.

Now try this question:

Question

Eliza has \(\pounds560\). She deposits it in a bank account that pays \(3.7\%\) interest per annum.

She leaves it in the bank for two months.

How much money does Eliza have now?