Suppose that an investment pf 8000 earns interest at a rate of 15% compounded per year. How much interest will the investment earn after 30 years?
We can use the formula for compound interest:
A = P(1 + r/n)^(nt)
where A is the final amount, P is the principal (starting amount), r is the interest rate, n is the number of times the interest is compounded per year, and t is the time in years.
In this case, P = 8000, r = 0.15 (15% as a decimal), n = 1 (compounded annually), and t = 30. Plugging in these values, we get:
A = 8000(1 + 0.15/1)^(1*30)
= 8000(1.15)^30
≈ 980,268.84
So after 30 years, the investment will be worth about $980,268.84. To find the amount of interest earned, we simply subtract the original principal from the final amount:
Interest earned = A - P
= 980,268.84 - 8000
≈ $972,268.84
Therefore, the investment will earn about $972,268.84 in interest after 30 years.