Jamal invested $5000.00 in an account that earns 2.50% simple interest per annum for a term of 10 years.
A.) How much interest will he earn?
B.) How much will his investment be worth at the end of the term?
10 * .025 * 5000
5000 + part A
(ignoring inflation :)
1,250
To find the answers to these questions, we can use the formula for calculating simple interest and the formula for calculating the total amount of an investment at the end of the term.
A.) To calculate the interest Jamal will earn, we can use the formula for simple interest:
Interest = Principal * Rate * Time
Where:
Principal = $5000.00 (the initial investment)
Rate = 2.50% per annum (2.50/100 = 0.025)
Time = 10 years
Plugging in the values, we have:
Interest = $5000.00 * 0.025 * 10
= $1250.00
Therefore, Jamal will earn $1250.00 in interest.
B.) To determine the total amount of his investment at the end of the term, we can use the formula:
Total Amount = Principal + Interest
Plugging in the values:
Total Amount = $5000.00 + $1250.00
= $6250.00
Therefore, at the end of the term, Jamal's investment will be worth $6250.00.