Calculate the interest in a year Multiply the annual percentage of interest by the investment to find the interest. interest in a year = 2% × 1,000 interest in a year = 0.02 × 1,000 interest in a year = 20 The annual interest is $20
Calculate the interest after 10 years Multiply the annual interest by 10 interest 10 years = 20 × 10 interest 10 years = 200 The sum of interest after 10 years is $200
Find total investment investment = first investment + interest in 10 years investment = 1,000 + 200 investment = 1,200
