How much simple interest is earned after 5 years if a bank lends $10,000 to a business for 8 percent a year?
To calculate the simple interest earned, we can use the formula:
Simple Interest = Principal * Rate * Time
Given that the principal amount is $10,000, the interest rate is 8% per year, and the time period is 5 years, we can substitute the known values into the formula:
Simple Interest = $10,000 * 0.08 * 5
Calculating this expression:
Simple Interest = $10,000 * 0.4
Simple Interest = $4,000
Therefore, the simple interest earned after 5 years is $4,000.
To calculate the simple interest earned, we can use the formula:
Simple Interest = Principal * Rate * Time
Given that the principal amount is $2,000, the interest rate is 7% per year, and the time period is 3 years, we can substitute the known values into the formula:
Simple Interest = $2,000 * 0.07 * 3
Calculating this expression:
Simple Interest = $2,000 * 0.21
Simple Interest = $420
Therefore, the simple interest earned after 3 years is $420.
How much simple interest is earned after 3 years if a person invests $2,000 at 7 percent a year?
Kendra signed a contract to play professional soccer. She got a $100,000 signing bonus, and she decided to invest the bonus in a money market account that pays 15% interest compounded yearly. She plans to use the signing bonus when she retires in 20 years. How much will her investment be worth in 20 years? Round the answer to two decimal places.
To calculate the future value of Kendra's investment, we can use the formula for compound interest:
Future Value = Principal * (1 + Rate)^Time
Given that the principal amount is $100,000, the interest rate is 15% (or 0.15), and the time period is 20 years, we can substitute the known values into the formula:
Future Value = $100,000 * (1 + 0.15)^20
Calculating this expression:
Future Value = $100,000 * (1.15)^20
Future Value ≈ $1,851,695.60
Therefore, Kendra's investment will be worth approximately $1,851,695.60 in 20 years (rounded to two decimal places).