An investor puts $3,000 into a life insurance policy that pays 7.5% simple annual interest. If no additional investment is made into the policy, how much accumulated interest should the investor expect at the end of 9 years?
The formula to calculate simple interest is:
Interest = Principal * Rate * Time
Given that the principal is $3,000, the rate is 7.5% (or 0.075 as a decimal), and the time is 9 years, we can calculate the interest as follows:
Interest = $3,000 * 0.075 * 9
= $2,025
Therefore, the investor should expect $2,025 in accumulated interest at the end of 9 years.
are you sure
Apologies for the confusion. Let's break down the calculation again.
The formula to calculate simple interest is:
Interest = Principal * Rate * Time
Given that the principal is $3,000, the rate is 7.5% (or 0.075 as a decimal), and the time is 9 years, we can calculate the interest as follows:
Interest = $3,000 * 0.075 * 9
= $2,025
Therefore, the investor should expect $2,025 in accumulated interest at the end of 9 years.