An investor puts $6,500 into a life insurance policy that pays 5.5% simple annual interest. If no additional investment is made into the policy, how much accumulated interest should the investor expect at the end of 10 years?
$3575.00
$11102.94
$4602.94
$35750.00
$3575.00
To calculate the accumulated interest at the end of 10 years, we can use the formula:
Interest = Principal x Rate x Time
Given:
Principal = $6,500
Rate = 5.5% = 0.055
Time = 10 years
Interest = $6,500 x 0.055 x 10
Interest = $3575.00
Therefore, the investor should expect $3,575.00 in accumulated interest at the end of 10 years.