your parents invest $500 on each birthday since the day you were born until you're 25. each investment earns 6.4% simple interest.
how much will you have on your 25th birthday?
If you are talking about simple interest and not compounding interest then you would just use the formula:
A = P+ Prt
Where Prt is the interest.
500 x 25 = 12500
A = 12500 + 500(.064)(25)
Can you finish from here?
200
To calculate the total amount you will have on your 25th birthday, we will need to calculate the interest earned on each investment and then add them up. Here's how you can do it step by step:
1. Determine the number of investments your parents made: Since they invested $500 on each of your birthdays from the day you were born until your 25th birthday, they made a total of 25 investments.
2. Calculate the interest earned on each investment: The interest rate given is 6.4%, which can be written as 0.064 in decimal form. To determine the interest earned on each investment, multiply the investment amount ($500) by the interest rate (0.064):
Interest earned on each investment = $500 * 0.064 = $32
3. Calculate the total interest earned: Since your parents made 25 investments, multiply the interest earned on each investment ($32) by the number of investments (25):
Total interest earned = $32 * 25 = $800
4. Calculate the total amount you will have on your 25th birthday: To find the total, add the total interest earned to the sum of all the investments made. Your parents invested $500 on each birthday for 25 years, so the total amount invested is:
Total investment = $500 * 25 = $12,500
Adding the total interest earned to the total investment:
Total amount on your 25th birthday = Total investment + Total interest earned
= $12,500 + $800
= $13,300
Therefore, you will have $13,300 on your 25th birthday.