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 an investor puts $3,000 into a life insurance policy with 7.5% simple annual interest, the principal would be $3,000 and the rate would be 0.075. The time is given as 9 years.
So, using the formula:
Interest = $3,000 × 0.075 × 9
Interest = $2,025.
Therefore, the investor should expect $2,025 in accumulated interest at the end of 9 years.