We are able to convert decimals into percentages by multiplying our decimal by 100; we do the opposite to what we were doing when we were converting percentages into decimals, which was divide by 100.

**Simple Interest**

With simple interest, the interest amount is the same throughout the whole period. For example, I place £4000 in a bank account that gives 9% interest per year for 5 years. How much money will I have after 5 years?

The interest amount is the same throughout the whole period. Let’s work out what the interest is for the first year. There are a few different methods to work out the amount of interest that I receive for the first year (these methods are explored in more detail in an earlier section in percentages; click here to be taken through to that section).

**Method 1: finding 1%**

This method involves finding 1% and multiplying 1% by the amount of percent that we need. To find 1%, we divide the amount of money (£4000) by 100.

Therefore, 1% is equal to £40. We want 9%, which means that we multiply our value for 1% by 9 as 9% is 9 times bigger than 1%.

The interest for 1 year is £360.

**Method 2: converting 9% into a decimal**

This method involves turning 9% into a decimal and multiplying the amount of money saved by that decimal. This is a much quicker way of finding the amount of interest, but it is slightly more complex, so use the first method if you feel more confident with that method.

9% as a decimal is 0.09 (we obtain this value by dividing 9 by 100). The next step is to multiply the amount that was saved by 0.09.

This method also gives us the interest that was earned after one year as £360.

With simple interest, the amount of interest is the same throughout the whole period where interest was earnt. Therefore, we multiply the amount of interest per year by the number of years that the money was kept in the bank for (which was 5).

Therefore, the amount of interest that was earnt after 5 years was £1,800.