$5,000 is invested for 7 years at an annual simple interest rate of 20%.
a) You will earn $ (round to the nearest cent)
in interest (round to the nearest cent
b) The future value is
(round to the nearest cent).
Help me out please need to double check my answer!!
Thank you for a better explanation oobleck! It’s makes a lot for sense now thank you!
To find the answer, we can use the formula for simple interest:
Interest = Principal x Rate x Time
a) To calculate the interest earned, we substitute the given values into the formula:
Principal = $5,000
Rate = 20% (which can be written as 0.20)
Time = 7 years
Interest = $5,000 x 0.20 x 7
Using a calculator:
Interest = $5,000 x 0.20 x 7 = $7,000
So, you will earn $7,000 in interest (rounded to the nearest cent).
b) To calculate the future value, we need to add the interest earned to the principal:
Future Value = Principal + Interest
Future Value = $5,000 + $7,000
Using a calculator:
Future Value = $5,000 + $7,000 = $12,000
So, the future value is $12,000 (rounded to the nearest cent).
Therefore, the answers are:
a) You will earn $7,000 (rounded to the nearest cent).
b) The future value is $12,000 (rounded to the nearest cent).
if simple interest,
(a) i = Prt
(b) FV = principal + interest
double check ... sure >wink wink<