Abbi invested $1,000 in a certificate of deposit with a simple interest rate of 4%. Find the interest earned in 8 years. Then find the total of principal plus interest.
I = PRT
I = 1,000 * 0.04 * 8
I = ?
To find the interest earned in 8 years, you can use the formula:
Interest = Principal × Rate × Time
In this case, the principal is $1,000 and the interest rate is 4%. However, since it is a simple interest rate, it remains constant throughout the entire period. So the formula becomes:
Interest = $1,000 × 0.04 × 8 = $320
Therefore, Abbi earned $320 in interest over 8 years.
To find the total of the principal plus interest, you need to add the interest earned to the original principal amount:
Total = Principal + Interest
Total = $1,000 + $320 = $1,320
So, the total amount after 8 years would be $1,320.