Suppose you got $5000 from family at your high school graduation. You decide to invest it for 30 years. If you invest it at 8% in a simple interest bond, how much is it worth after 30 years?
I = PRT
I = 5,000 * 30 * 0.08
I = 12,000
5,000 + 12,000 = ?
To calculate the final amount after 30 years, we need to use the simple interest formula:
Final Amount = Principal + (Principal * Interest Rate * Time)
In this case:
Principal = $5000
Interest Rate = 8% = 0.08 (as a decimal)
Time = 30 years
Substituting these values into the formula:
Final Amount = $5000 + ($5000 * 0.08 * 30)
Simplifying the equation further:
Final Amount = $5000 + ($5000 * 0.08 * 30)
Final Amount = $5000 + ($5000 * 0.08 * 30)
Final Amount = $5000 + ($5000 * 2.4)
Final Amount = $5000 + $12000
Final Amount = $17,000
Therefore, after 30 years, the amount will be $17,000.