GMAT Quantitative Reasoning Practice Test 1

This problem can be solved by using the simple interest formula:
interest $=$ principal $\times$ rate $\times$ time .
Remember to change the interest rate to a decimal before using it in the formula. $\mathit{I}=1,000\times 0.05\times 2=\mathrm{\$}100$. Since $\mathrm{\$}100$ was made in interest, the total in the bank account is $\mathrm{\$}1,000+\mathrm{\$}100=\mathrm{\$}1,100$.